NUR-SULTAN

Kazakhstan has revised its economic growth forecast upwards to 3.1 percent in 2021 from a previous projection of 2.8 percent amid improved macroeconomic indicators in the first quarter of this year, Economy Minister Aset Irgaliyev said.

The Central Asian country’s economy contracted 1.6 percent in the first quarter of this year after shrinking 2.9 percent in January-February. The government projected it would contract by 4.5 percent in the first three months.

Irgaliyev said that according to revised forecasts, the processing industry would grow by 5.2 percent, construction by 5 percent and information and communications by 6.5 percent.

According to the National Bank’s forecast, exports will increase by $10.8 billion to $52.2 billion in 2021, while imports will amount to $37.1 billion.

The International Monetary Fund said earlier this month that Kazakhstan’s gross domestic product (GDP) was forecast to grow 3.2 percent in 2021 and 4.0 percent in 2022. Annual inflation is projected at 6.4 percent this year and 5 percent in 2022.

According to the World Bank’s latest projections, the country’s economic growth is expected to rebound in 2021, driven by the resumption of domestic activity, recovery in global demand for oil, continued fiscal support measures, and a successful national inoculation against the COVID-19 virus.

With the continued pace of recovery, the economy is expected to grow within the 3-4 percent range in 2021 and 3.5 percent in 2022.

Irgaliyev told a government meeting that annual inflation was forecast to remain in the 4-6 percent corridor. Annual inflation slowed down to 7 percent in the first quarter.

He said that the revision of the state budget envisaged a rise in expenses by 1.3 trillion tenge. The budget deficit is forecast at 3.5 percent of GDP.

The oil-exporting Central Asian nation plans to rely heavily on its $65 billion fund in the coming years to fill its budget gaps.

The central bank’s total reserves fell by $1.13 billion in March to $33.54 billion as of April 1, mainly due to a 4.5 percent decline in the gold price on the world market $1,685 from $1,765 per ounce. Prices started to rise again on April 1 and the central bank’s gold portfolio increased by $756 million.

The central bank’s currency reserves stood at $90.64 billion as of April 1 after repayment of the state debt to the amount of $72 million.