ASTANA – The World Bank has released its monthly economic update for Kazakhstan for May, covering changes in economic activity, inflation and bank lending.
Photo credit: Center for Global Development.
“Real gross domestic product (GDP) grew a modest 0.7% (seasonally adjusted) in the first quarter, down from a steady 1.2% quarterly average throughout 2023, attributable, as previously reported, to the dampening effect of investment and fiscal spending,” the report reads.
Consumer price inflation slowed to 8.5% year-on-year in May, down from 8.7% in April amid softer domestic demand. Monthly inflation slowed for the third straight month to 0.4% month-on-month in May.
As noted in the report, food and non-food prices moderated, while services prices are likely catching up to higher costs associated with solid real wage growth.
The trade surplus in the first quarter rose 9% year-on-year to $5.7 billion, driven mainly by weaker imports. Due to sluggish domestic demand, imports were down 7% year-on-year in the first quarter. Goods exports fell by 2.6%, largely due to a decline in exports of chemical products and machinery and equipment.
Real lending rates (adjusted for inflation) for both firms and households surged to 8.4% and 11.1% in April, as headline rates remained sticky and deposit rates fell while inflation receded. These rates far exceed pre-pandemic levels, boosting banks’ net interest margins and profits.
