World Bank Releases Monthly Economic Update for Kazakhstan

ASTANA – The World Bank has published its monthly economic update for Kazakhstan for April, covering trends in economic activity, inflation, bank lending, and budget spending.

The World Bank building. Photo credit:

Real gross domestic product (GDP) growth slowed to 3.9% in the first quarter year-on-year and 0.9% quarter-on-quarter seasonally adjusted, following solid advances in the second half of 2023. The slower growth rate was primarily attributable to drag from investments and fiscal spending, whereas household demand and exports continued to increase, with a weakened momentum.

Inflation fell from 9.1% in March to 8.7% in April compared to the previous year. Prices of food and non-food goods have continued to slide from earlier peaks, but service inflation is increasing and now stands at 13.5%.

Services prices have risen at almost half the rate of goods, and firms are usually slow to adjust prices as quickly. Sector prices are likely catching up to reflect the broader cost increase, such as labor, across the economy.

Household loan growth continued to be robust, while credit demand from firms remained subdued. In April, consumer credit grew by 25.2% in real terms, and mortgages increased by 5.5%, constituting nearly 85% of total credit growth. Credit to firms grew at 3.9% in April.

Total government revenue in January-March is estimated to have declined only slightly, by 0.9%, reaching $12.7 billion due to unchanged global oil prices and steady domestic crude production. Non-oil receipts, at $9.6 billion, rose by 3.1%, driven by increases in income taxes (+48.4%), social tax (+45.6%), and excise tax (+5.4%).

Government spending is estimated at $12.6 billion in the first quarter, up by 5.1% compared to last year. Notable changes include rising debt servicing costs, which surged from $1.2 billion in the first quarter last year to $1.6 billion in the same period this year (up by 30.6%). This resulted in a decline in the fiscal surplus, which fell from an estimated $0.8 billion to near zero.

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