Economic growth in Kazakhstan in 2017 is forecast to rise reflecting continued fiscal spending for consumption and investment and higher earnings from oil exports, the Asia Development Bank (ADB) said in Asian Development Outlook 2017: Transcending the Middle-Income Challenge.
In its Asian Development Outlook (ADO) 2017, ADB forecasts Kazakhstan’s gross domestic product growth to reach 2.4% in 2017 and 2.2% in 2018, from the 1% registered in 2016.
Annual inflation in 2017 is projected at 8% within the National Bank’s target range of 6-8%. The report, however, notes the need to strengthen the banking sector as a key policy challenge.
“The measures being taken by the authorities to address the weaknesses of the banking sector are an important step in the right direction. But more needs to be done through stress-testing and asset quality review in line with international standards to identify which banks need additional capital and improve the assessment of non-performing loans,” ADB’s Country Director for Kazakhstan Giovanni Capannelli said.
The ADO suggests industry will expand by 2.4% in 2017, boosted by high infrastructure spending and increased production of oil and gas condensate. Oil production is expected to rise by 3.8% to 81 million tons with higher production at the Kashagan oil field compared to last year, and expansion of the Tengiz oil field. Agriculture is projected to grow by 3.5% in 2017 as a result of the new state support program.
