Galim Khussainov
Inflation and the tengeBankingLending and mortgagesTaxationEconomy and public policyManagement

Economy and public policy · 1 min read

Kazakhstan's Economy Has Entered a Recession

Translated from Russian with the help of AI. Original: Russian version

National Bank of Kazakhstan data for January–April 2016 show that the economy has entered a recession, with GDP down 0.2%, mining in decline, trade shrinking and lending contracting.

Congratulations, we are officially in a recession.

The National Bank of Kazakhstan has published its brief economic review for January–April 2016. According to the review, GDP fell by 0.2% compared with the same period last year.

For the second year running, the main driver of the decline is the mining industry. The locomotive of our economy is slowly starting to roll backward. Output in this sector fell by 2.7%, and the trend remains negative.

Manufacturing showed growth, but only thanks to metal processing, which is hard to count as manufacturing at all.

Exports and imports fell by 30%, which is hardly surprising given the oil prices of the first quarter.

Inflation stood at 15.4%. Given the ability of government agencies to "touch up" statistics, it is fair to call inflation quite high.

Retail trade turnover fell by 2.3%. This shows that the effect of cheap prices in dollar terms is wearing off, the stockpiles have been eaten through, and a hangover is coming.

Meanwhile, Uzbekistan is confidently reporting economic growth of 8% for the first quarter.

In Kazakhstan, by contrast, lending, the economy's main source of fuel, has decreased by 2.8%, and the trend is downward. And some people apparently planned to boost 2016 GDP precisely through increased lending.

Published in: Ratel.kz, 2 June 2016

More on this topic

Fuel Prices: Why Market Prices Are Fairer

Why cheap fuel makes Kazakhstan neither richer nor more competitive: the country subsidizes its neighbors, loses added value from refining and aviation transit, and bears urban and environmental costs. The case for liberalizing prices, with targeted support for vulnerable groups designed in advance.

The Harvard OPM Reunion in Kazakhstan: The Economic Impact

How a four-day Harvard Business School OPM 64 class reunion in Kazakhstan, attended by just over 90 business owners, affected the economy: at least $5,000–6,000 spent per guest, more than half saying they were now unofficial ambassadors for the country, five or six expressing interest in investing, and talks by the heads of the AIFC and Atameken that dispelled myths about Kazakhstan.

Event Tourism and Car Rental

How Kanye West's concert in Almaty showed the potential of event tourism for Kazakhstan, benefiting mainly SMEs, and why turning short visits into longer, higher-spending stays requires fixes to ground infrastructure, ride-hailing, car rental, parking and payment systems, mapping services, roadside facilities and foreign marketing.