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IMF reduces forecast of Kazakhstan's GDP growth in 2008 by 4.5%
Astana, September 29, 2008
The International Monetary Fund has reduced the forecast of Kazakhstan's GDP growth by 4.5% vs. the earlier forecasted 5%.
"We expect real GDP growth to remain relatively weak in the period ahead. Banks will likely be more constrained in their ability to replace maturing external borrowing in the current market environment, which means real credit growth will continue to decline, and the drop in oil prices will weaken a key support that the economy enjoyed during the first half of 2008. All-in-all, we project real GDP growth of 4.5 percent this year and 5.3 percent in 2009. There is considerable uncertainty around these projections given the rapidly evolving global economic and financial situation, but, on balance, risks are on the downside," according to Concluding Statement of the 2008 IMF Mission published on the website of the Kazakh Ministry of Economics and Budget Planning.
"With evidence mounting of a slowdown in the world economy and significant stresses emerging in the U.S. financial sector, world equity prices have been very volatile, lending spreads have widened, and oil and commodity prices have fallen from their mid-year highs. While the direct impact on Kazakhstan from this financial turmoil has been much more limited than in August-September 2007-interbank interest rates and the exchange rate have been little affected this time-CDS spreads on the sovereign and banks have risen and the local stock market has fallen sharply," the statement runs.
" Kazakhstan has large financial resources to help it weather the current situation, and medium-term economic prospects remain favorable. Official foreign currency assets, comprising central bank (NBK) reserves and oil fund (NFRK) assets, reached $48 billion at end-September, well above the mid-2007 level. The current account balance has strengthened significantly this year, and oil production is set to increase substantially in the years ahead," says the statement.
IMF mission was visiting Kazakhstan September 22 to 26, 2008 to assess the developments after their consultations in April 2008.