According to the National Bank, a gradual revival of business activity in the economic sectors is
expected, which will, among other factors, depend on recovery of external demand for export products,
pace of lifting of quarantine restrictions, mood improvement of households and businesses,
consumption growth and investment activity. “In 2021, growing consumer needs will be the driver of
economic recovery, which is expected to increase as of 2021 beginning. Consumer demand will
demonstrate positive dynamics due to growing real wages and real incomes of the population thanks to
a gradual recovery of business activity in industries, as well as expected increase in wages to public
sector employees,” the report of the National Bank of the Republic of Kazakhstan says. Growth in
household demand will be supported by consumer lending reactivation. Household demand will peak in
the second quarter of 2021 due to the lower base of 2020 (decline in the second quarter of 2020 by
A positive contribution from gross capital formation is expected, which will be moderate grow against
the background of further implementation of industrial programs, development projects of the city of
Turkestan and restoration of investment activities in the extractive economy industries. “An additional
incentive for further growth of investments in housing construction will be the program of withdrawing
part of savings from the UAPF. However, some uncertainty associated with the further continuation of a
large project in Kazakhstan at the TCO field (FGP WPMP) and investment project at KPO is saved. If the unfavorable epidemiological situation in the fields remains, there are risks of slowdown in the growth of investments in the economy in 2021,” the National Bank notes.
Government consumption will also contribute positively to GDP growth as a result of moderate growth
in government operating expenditures. With consumer demand recovery in the background, imports
are expected to rise, which will limit the contribution of net exports to GDP growth.
“The GDP growth rate will accelerate in 2022 and make 3.7% -4.0%. Economic activity will grow against the backdrop of further improvement in the epidemiological the situation related to the wider coverage of vaccination against COVID-19, and the growing external demand due to the growth of the economies of the trading partner countries. Along with that, easing of restrictions on the OPEC+ deal terms and the subsequent end of agreement between oil countries will lead to an increase in oil and gas condensate production compared to 2021. This will have an additional upward impact on the GDP growth due to the accelerated growth of exports and investment activity,” the NBRK noted.
According to the regulators forecasts, the slowdown in inflation dynamics will proceed against the
background of weak external inflationary pressure accompanied by expectations that inflation in China
and the EU will not reach their target levels and that inflation in Russia will be close to the target levels.
In addition, a gradual decline in global food prices is expected after their significant growth in recent
months. “An increase in cultural areas for winter wheat in the US, EU and Russia will have an additional
impact on normalization of world food prices for cereals. In addition, the deterrent effect on
disinflationary processes in 2022 will have to find the output gap by weakly positive levels in the context
of recovery of internal and external economic activity”, they noted in the bank of the first tier.
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