DEC. 3 2015 (The Conway Bulletin) – The World Bank predicted that Kazakhstan’s economy would grow at its slowest rate since the mid-1990s, four days after President Nursultan Nazarbayev tried to shrug off the worsening economic outlook by telling listeners during a state-of-the- nation speech that they have never had it so good.
Throughout the year economists at the World Bank have been down- grading growth rates in Kazakhstan but a new lower GDP growth estimate of 0.9% this year, smaller than growth rates in the 2008/9 global financial crisis, still came as a shock.
And worse was to follow. The World Bank said GDP growth would measure only 1.1% in 2016.
“The uncertain external outlook will dampen private investment, while the pass-through effect of the tenge depreciation will reduce house- hold consumption and public consumption will remain modest due to the ongoing fiscal adjustment.” the World Bank said in its report.
From 2017, the economic outlook would improve mainly thanks to the giant Kashagan oil field coming on- stream. But the warning signs are there.
If the World Bank’s outlook comes through, it’ll be the first time for over 20 years that growth in Kazakhstan has been so low for two consecutive years.
Three days earlier Mr Nazarbayev had tried to rally his countrymen in a televised state-of-the-nation speech that was filled with talk about toughing out the economic malaise.
He blamed factors outside his control for the economic downturn and then told his audience that they have never lived in such a prosperous period.
“Never before have our people lived as well as they do now,” he said. “We have achieved a lot.”
And Mr Nazarbayev needs to put a brave face on things. Inflation has jumped to around 10% and the value of the tenge currency has halved in the past 18 months.
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(News report from Issue No. 259, published on Dec. 4 2015)