Country Economic Forecasts > Kazakhstan

Kazakhstan has been hit hard by the end of the commodities supercycle and also by the recession in Russia and weaker growth in China. In addition, falling real incomes, declining confidence, lower oil output and tightening in fiscal and monetary policy are weighing on the economy. In light of the latest data, sharp KZT depreciation and revisions to H1 GDP, we have cut our 2015 GDP growth forecast to 1.2%. We expect growth of 2.2% in 2016.The KZT continues to fall, with the rate of decline accelerating in early November following the move by the central bank to let the currency find its own value; it is now 36% below the low point of the previous trading corridor. We expect it to fall further in the near term, in line with the weakening Russian ruble. KZT weakness saw consumer prices jump 5.2% in October, the biggest monthly rise since March 2005, lifting annual inflation to 9.6%. At the same time, the current account is moving into deficit, forecast at US$5.1bn or 2.8% of GDP in 2015 as a whole, raising concerns about external financing and an increasing debt burden.