EBRD expects Kazakhstans GDP to grow by 5% this year.

By bne IntelliNews July 26, 2012
The EBRD expects Kazakhstans GDP to increase by 5% this year and 6% y/y in 2013. The forecast of the bank has not changed since May when the previous projection was published. At the same time, the EBRD noted that the GDP growth slowed down in Q1 due to weaker performance of extraction and construction sectors. However, in Q2 GDP growth rebounded and in H1 reached 5.6% y/y. Still, it is below 7.5% y/y growth reported in 2011. The Kazakh government is more positive about the economy expansion as it expects GDP growth at the level of 6% while the Kazakh president even stated that GDP would expand by 7% this year. The IMF sees Kazakhstans GDP growth at 5.9-6% this year. The EBRD also noticed that bank credit growth which was practically flat until early 2011 finally picked up this year (by 17% y/y in May) which was mainly driven by state-sponsored subsided loan program. Otherwise, the banking sector remains weak with non-performing loans at the level of 30% in the sectors loan portfolio. At the same time, the problems with BTA Bank are continuing as the bank is seeking the second loan restructuring in less than 2 years. The exchange rate remains stable as the National Bank of Kazakhstan continues to intervene on the market despite formally abolishing the exchange corridor in Feb 2011.

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