Consumer sector remains main growth driver of CIS economies, EDB analysts say

In the first half of 2012, the total GDP of the CIS countries increased by 4.4% in real terms compared with 4.3% in the same period last year. Kazakhstan’s economy retained GDP growth rate at 5.6% in the second quarter of 2012.

Consumer sector — trade and services — remain the main growth driver of almost all the CIS economies, while industrial production is showing a moderate decline amid falling oil prices in the second quarter of 2012. Analysts of the Eurasian Development Bank arrived at this conclusion in their Macro Monitor CIS report. According to the analysis, activity increased in construction and the financial sector showed stable growth rate in lending.

Elvira KURMANALIYEVA, HEAD, COUNTRY ANALYSIS DEPARTMENT, EDB: «As for the economy of Kazakhstan, we concluded in the October issue that despite the obvious signs of a slowdown, the economy is showing robust domestic demand, supported by high activity of the population. This is why we believe that the country has sufficient economic development and inflation is at a manageable level, which corresponds to the main focus of the monetary policy of the country’s National Bank».

In the first half of 2012, the total GDP of the CIS countries increased by 4.4% in real terms compared to 4.3% for the same period last year. Kazakhstan’s economy retained GDP growth rate at 5.6% in the second quarter of 2012. According to analysts, the country’s short-term economic indicator totaled 2.7% in 9 months, while in the first half it was registered at 3.8%. The main reason lies in a moderate slowdown in the goods-producing industries.

Elvira KURMANALIYEVA, HEAD, COUNTRY ANALYSIS DEPARTMENT, EDB: «As for the industrial sector, it is due to the slowdown in exports. So if we deduct export prices from the nominal growth rate, we will see that exports decreased in real terms. There is an explanation which lies in a slowdown in the economies of other countries and trading partners. We see a slowdown in the Chinese economy; we see a recession in the euro zone, which make up almost half the turnover of Kazakhstan».

As of October 1, the annual increase in consumer prices was 5.5%, which is half a percentage point higher than the September figure. However, analysts say that these figures correspond to the monetary policy of the National Bank of Kazakhstan.

Elvira KURMANALIYEVA, HEAD, COUNTRY ANALYSIS DEPARTMENT, EDB: «From the beginning of the year we have seen that the National Bank somewhat eased the ongoing monetary policy. The refinancing rate was reduced by four or five notches. However, within the controlled exchange rate the monetary policy is affected by world prices and the oil price. Therefore, we have seen that despite the rather aggressive easing of the monetary policy, prices continued a slight increase in inflation. And we don’t expect the inflation to be within the previously announced range of6—8% at the end of the year».

Analysts also mentioned the effectiveness of measures undertaken by the government in order to maintain the stability of Kazakhstan’s economy. It is mainly characterised by the coordination of actions of the National Bank and the Ministry of Finance in the area of monetary and fiscal policy.

Elvira KURMANALIYEVA, HEAD, COUNTRY ANALYSIS DEPARTMENT, EDB: «So we see that the Government is addressing measures to reduce dependence on natural resources by implementing investment programmes designed not only to create industries from scratch but also to raise the level of added value for the petroleum refining industry sector».

Speaking of prospects, analysts expect Kazakhstan’s main trading partners — the EU countries- to overcome the recession gradually, which in turn will have an impact on the economic growth of the country.