Economic Analysis - Broad Based Recovery Ahead - JUNE 2017

BMI View: Economic growth in Kazakhstan will rebound over the next two years after the economy bottomed out in 2016 . This recovery will be driven by three key themes; increasing domestic crude production and higher global oil price s , investment from China ' s 'Belt & Road' initiative, and a stronger currency and easing inflation . That said, longer-term h eadwinds to the country ' s economic recovery remain due to a high degree of political uncertainty.

Kazakhstan's economy will rebound over the next two years, primarily supported by higher global oil prices and increased crude production. Moreover, China's ambitious 'Belt & Road' initiative will support economic growth via higher fixed investment, while a stronger domestic currency and easing inflation will bolster household spending in the economy. We forecast real GDP growth to accelerate to 2.3% and 2.7% in 2017 and 2018 respectively, up from 1.0% in 2016, but caution that headwinds to growth remain amid a high degree of political uncertainty over the coming years.

Rising Oil Production And Higher Global Prices To Drive Growth

Oil Prices Pushing Economic Growth
Kazakhstan - Short-Term Economic Indicator & Brent Crude, % chg y-o-y
Note: The Short-Term Economic Indicator measures the cumulative change in the value of the goods and services produced by the country economy compared to the corresponding period in the previous year. Source: Kazakhstan Statistics Committtee, BMI

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