Bank Deleveraging To Constrain Economic Recovery

Following the 2.2% fall in real GDP during the first quarter, we expect the Kazakh recession to find a bottom at some point during Q209-Q309, with our forecast for a full-year contraction of 1.8% still in play. Beyond 2009 we caution that the recovery will be fairly anemic as deleveraging in the still fragile banking sector will cap loan growth, and in turn weigh on consumer and investment spending over the medium term

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