Government approves Kazakhstan’s 2020-24 socio-economic development forecast

The reporting and statistical GDP figures for 2018 and the economic development for the 7 months of the present year, the renewed forecasts of world economic growth and tendencies on the global commodity markets have served as the underlying factors in determining a forecast of social and economic development of the country for 2020-24, Kazakh National Economy Minister Ruslan Dalenov reported this information at the Government meeting.
Nur-Sultan27 August , 17:03

According to the Minister, Kazakhstan’s GDP maintains a stable growth of 4.2 per cent, inflation is within the target corridor of 5.4 per cent, and investments grow at a rate of 11.3 per cent.

“The world financial organizations’ data indicates that a consensus forecast of an oil price will be 65.1 US dollars per barrel in 2019 and will reduce to 62.9 US dollars per barrel by 2020”, he stated.

Three possible cases – optimistic, base, and pessimistic - have been reviewed. The optimistic case implies an increase in the oil price to up to 65 US dollars per barrel and a moderate rise in metal prices. The base case suggests the oil price at 55 US dollars per barrel and metal prices at the current level. The pessimistic case entails a decrease in the oil prices to 45 US dollars per barrel coupled with an insignificant decline in metal prices.

A forecast of socio-economic development of Kazakhstan for 2020-24 is built upon the best case.

Real GDP growth is forecasted at 4.1 per cent in 2020, increasing to 4.7 per cent by 2024, with 4.4 per cent annual average growth in GDP in the five-year period.

“GDP growth will take place due to an increase in gross accumulation, domestic consumption and exports. Investments will be a considerable factor for maintaining the economic growth rate”, Dalenov said.

As for sectors, most of the growth is expected in the non-primary sector - manufacturing, services and construction, with the given sectors’ average growth rate of 4.7 per cent, contributing to GDP growth at 3.5 per cent.

Oil production will raise from 90 million tonnes in 2020 to 100 million tonnes by 2024, which will be possible through expanding Tengiz, Karachaganak and Kashagan fields.

Nominal GDP will be 75 trillion tenge in 2020 and 106 trillion tenge by 2024, while GDP per capita will be 10.5 thousand US dollars in 2020, increasing to 14.3 thousand US dollars by 2024.

The target corridor of annual inflation will remain within 4 and 6 per cent in 2020-21, and 3 and 5 per cent in 2022-24. Unemployment will decrease to 4.7 per cent in 2024.

A forecast of budget parameters and the National Fund up to 2020-22 has been formed on the basis of the macroeconomic prognosis. The national budget’s revenues as forecasted will be 8 trillion tenge in 2020 and 8.6 trillion tenge by 2021 and 9.4 trillion tenge by 2022. The budget deficit will be identified at 2.1 per cent of GDP in 2020, declining in 2021 to 1.5 per cent of GDP and in 2022 to 1 per cent of GDP. The non-oil budget deficit will reduce to 7 per cent of GDP in 2020, reducing in 2022 to 5.1 per cent of GDP.

Taking into consideration of the given parameters, the national budget’s expenses are expected to reach 12.7 trillion tenge in 2020, 13.2 trillion tenge and 16.6 trillion tenge in 2021 and 2022, respectively.

Yerbolat Dossyaev, the National Bank Chairman, reiterated that the Bank’s main target is to maintain the inflation within 4-6 per cent in 2019-21, reducing it to 3-5 per cent.

“Reaching the inflation targets will depend on the following factors: first, external monetary conditions. Week global demand and uncertainty surrounding the trade policy have eased the external monetary conditions. In particular, the rate of the United States Federal Reserve System has been reduced for the first time in 10 years. Other leading countries’ central banks are concentrated on low-interest-rate policies. The U.S. economy slowdown helps to reduce the risks of capital outflows from the developing countries and lessening the pressure on their currencies. Second, the external inflationary pressure remains at a low level at the background of the inflation stabilization in Russia within its target as well as low price growth rates in the EU and China. The third factor for maintaining the inflationary pressure is rise in food prices on the global markets”, the National Bank Chairman stated.

The second-tier banks’ credits to the economy will raise from 13.7 trillion tenge in 2019 to 21.4 trillion tenge in 2024, while deposits will grow from 18.6 trillion tenge to 29 trillion tenge.

The National Bank has forecasted a decline in Kazakhstan’s exporting products, decreasing by 12 per cent in 2019 compared with 2018 taking into account lower oil prices from 71.6 US dollars in 2018 to 61.3 US dollars in 2019.

The National Bank Chairman pledged that the Bank’s policy will focus on levelling the influence of negative external factors.

At the end all the participants of the Government session have approved the forecast of socio-economic development of Kazakhstan for 2020-24.

Adlet Seilkhanov