Halyk Finance Reports on 2023 Record Economic Growth in 10 Years

ASTANA – The analytical center of the Halyk Finance investment bank released a macroeconomic report for the fourth quarter of 2023 on Jan. 30, reporting on the 2023 record economic growth over the past decade.

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“For the first time in the last 10 years, the economic growth rate exceeded the 5% mark, reaching 5.1%,” reads the report.

The government’s expansionary fiscal policy with transfers from the National Fund drove the growth. This made it possible to increase investment in fixed assets, which also reached a record level since 2013. The investment surge, however, was not in the traditional oil sector but in public utilities and transport infrastructure, which had been degraded for many years due to low tariffs set by the state.

According to the experts, inflation at the end of 2023 fell to 9.8%, which was halved compared to the beginning of the year. Despite numerous pro-inflationary factors, the National Bank’s tight monetary policy, the tenge exchange rate, and relatively favorable global price dynamics significantly slowed down price growth.

The report noted that the government’s targeting of high economic growth rates has yielded results: by the end of 2023, the economy, in real terms, rose by 5.1% after a 3.2% growth last year.

According to Halyk Finance forecasts, in the absence of additional extra-budgetary transactions, economic growth in 2024 will be at the level of 4.5%, which will be facilitated by the stabilization of inflation and reduction of the base rate, as well as large infrastructure projects of the state.

“Moderate growth forecasts for this year are based on the delay in the launch of future expansion projects at the Tengiz field. At the same time, risks from Russia remain due to ongoing sanctions, which could also negatively affect Kazakhstan,” the report reads.

According to analysts, amid the stabilization of the global economy and reduced pressure on domestic prices, the inflation rate by the end of 2024 will be 8.5%, and the adequate base rate level, in this case, will be 12%.

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