Henry Kirby in London -
A 97.7% landslide victory in Kazakhstan’s general election on April 26 saw Nursultan Nazarbayev retain the presidency. However, dire trade data and mounting pressure on the economy means the celebrations could be short lived.
In the final quarter of 2014 oil prices fell from just under $100 per barrel to just under $60 – a decline that had an immediate and pronounced effect on the major oil producer’s balance of payments.
As the first bne:Chart shows, Kazakhstan’s total export revenues, 60% of which comes from the oil sector, fell by over 10% between the third quarter of 2014 and the fourth, from $19.4bn to $17.3bn. Kazakhstan’s export revenues for January and February stood at $8.5bn, less than half of total export revenue for the fourth quarter of 2014, which does not bode well for its overall first-quarter figure.
This has significant implications for Kazakhstan’s overall economy, as the oil sector accounts for an estimated 20% to 30% of Kazakhstan’s GDP and more than 50% of budget revenue, according to Standard & Poor’s.
Kazakhstan’s merchandise has worsened significantly since oil prices began falling in mid-2014, as the second bne:Chart illustrates. As a percentage of GDP, the trade surplus has declined 9.7% as the oil price fell from $105 a barrel to $65, which is worse than Russia’s 5.2% fall in its surplus.
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