Growth rose to 6.0% from 5.0% in 2012, reflecting accelerated private consumption and investment, though the current account surplus shrank further to 0.1% of gross domestic product (GDP) from 0.3% a year earlier. The pace is projected to remain at 6.0% in 2014 and improve to 6.4% in 2015, as the February 2014 devaluation of the Kazakh tenge and new flows from the Kashagan oilfield should boost exports and the current account surplus.

Economic developments

GDP growth accelerated to 6.0% from 5.0% in 2012, driven mainly by robust private consumption and investment. On the supply side, industry expanded by 2.3%, up from 0.4% in 2012, as mining output rose by 3.1% from 0.4% in 2012. Agriculture rebounded strongly, rising by 10.8% after the 18.5% decline in 2012, as harvests expanded by nearly 20%. Preliminary data for 2013 show growth in services slowing to an estimated 7.4% from the 10.4% recorded in 2012, despite large gains of 12.7% in trade and 14.0% in communications.

On the demand side, based on 9 months’ data, consumption is estimated to have expanded by over 12.0%, up from 11.4% in 2012. Private consumption rose by 16.1%, versus 11.0% in 2012, fueled by rapid growth in consumer credit, though fiscal tightening slowed growth in public consumption to 1.6% from 13.2% in 2012. Net exports fell by about 30% during the same period, on top of an estimated 40% decline in 2012, as export volumes declined by 7.2% while import volumes rose by 23%. Investment in 2013 expanded by 6.5%, up from 3.8% in 2012, as public investment fell by more than 10%, but private investment rose by about 12%.

Selected Economic Indicators (%) - Kazakhstan 2014 2015
GDP Growth 6.0 6.4
Inflation 11.5 8.8
Current Account Balance (share of GDP)  0.6 2.3

Source: ADB estimates.

Economic prospects

Following the tenge devaluation in February 2014, growth is forecast to remain unchanged at 6.0% in 2014 and accelerate to 6.4% in 2015, mainly supported by higher investment and net exports.

On the supply side, industry is forecast to expand by 2.9% in 2014 and a further 4.0% in 2015, as mining revives and the first results of the industrialization program materialize. Production at the Kashagan oilfield, originally forecast to begin in 2014, may be delayed until 2015. Infrastructure development and preparation for the global Expo 2017 (themed “future energy”) will boost construction and related services. Agriculture growth is expected at about 4.0% in 2014, accelerating to 4.4% in 2015 thanks to ongoing support and huge investments under the state program Agribusiness 2020 to modernize and diversify output beyond grain production. Services should grow by about 8% each year, driven by fast expansion of trade, transport, communications, and business services.

On the demand side, consumption is forecast to grow by 6.2% in 2014 and 6.8% in 2015. The expansion in private consumption is expected to slow to 6.8% in 2014 because of new restrictions on consumer credit, higher taxes on property and transport, and the impact of tenge devaluation on prices, recovering to 7.5% in 2015. Meanwhile, growth in public consumption is projected to accelerate to 4.0% in 2014 and then subside to 3.8% in 2015. An anticipated rise in total investment (equipment plus structures) of 6.8% in both 2014 and 2015 should boost construction by 3%-4%. Net exports are forecast to rise by 4.0% in 2014 and 4.5% in 2015, as devaluation boosts mineral exports and slows import growth.

Source: ADB. 2014. Asian Development Outlook 2014. Manila.