Kazakh Economy May Grow 1.5% in 2010, Government

March 4. Bloomberg

By Nariman Gizitdinov

Kazakh Economy May Grow 1.5% in 2010, GovernmentThe economy of Kazakhstan, Central Asia’s largest oil producer, may expand as little as 1.5 percent this year, the government said in a statement published today in Kazakhstanskaya Pravda, its newspaper of record.

On March 1, the government cut its 2010 gross domestic product forecast by 0.4 percentage point to 2 percent even as it said the average oil price this year will increase by $15 a barrel to $65.

Today, the government further trimmed its forecast, saying the economy will expand 1.5 percent to 2 percent. The government expects consumer demand to resume gradually in 2010, though growth of agricultural output will slow, according to the statement.

Economic growth in Kazakhstan, which holds 3.2 percent of the world’s oil reserves according to BP Plc, slowed to 1.2 percent last year from 3.2 percent in 2008. The economy grew 10 percent on average each year between 2000 and 2007 as energy and commodity prices rose.

Kazakh Prime Minister Karim Masimov said on March 2 that economic growth of more than 7 percent a year would be “dangerous” as it could cause “bubbles” in the former Soviet republic’s economy.

The monetary policy of Kazakhstan’s central bank will be directed toward reaching the government’s inflation rate target of 6 percent to 8 percent, according to the statement. The bank’s exchange rate policy will help to achieve this goal, the government said.