Kazakh Economy to Exceed Forecast on Oil, Suleimenov Says

April 27. Bloomberg

By Halia Pavliva

The economy of Kazakhstan, the biggest energy producer in central Asia and the world’s largest miner of uranium, will outpace the government’s current growth forecast this year as commodities prices surge, said Deputy Economy Minister Timur Suleimenov.

“One of the key factors for faster growth is the oil price, which is expected to average $80 per barrel, compared with the $60 that we initially expected, and that will significantly change our” forecast, Suleimenov said in an interview in Washington. “Growth will be at about 4 percent this year.”

Oil traded in New York has advanced 67 percent in the past 12 months to exceed $83 a barrel yesterday. Central bank Governor Grigori Marchenko said on April 21 the economy may grow about 3.5 percent in 2010, raising the bank’s 2 percent forecast that had assumed an oil price of $60 a barrel. Output of Kazakhstan, which holds 3.2 percent of global oil reserves, expanded 1.2 percent last year.

Faster growth may force the government to raise its inflation forecast for 2010, compared with its official target of no more than 8 percent, Suleimenov said. Even so, accelerating inflation isn’t prompting the government to rethink economic policy, he signaled.

“At the moment, it’s too early to worry” about inflation. Suleimenov said.

Customs Union

Kazakhstan, which entered a customs union with Belarus and Russia on Jan. 1, still wants to join the World Trade Organization to support its exports and sustain economic growth, Suleimenov said.

“Regional integration has never hindered global integration,” said Suleimenov, who leads Kazakhstan’s delegation during this week’s talks with U.S. authorities over the WTO bid. “If there is goodwill from WTO members, particularly the U.S., technically we will be able to join the WTO in a year to a year and a half” after the Customs Union begins to operate.