Kazakhstan’s monthly update from World Bank

Economic activity

In the first quarter of 2024, Kazakhstan experienced a slowdown in economic activity, with real GDP growth decelerating to 3.9% year-on-year and 0.9% quarter-on-quarter seasonally adjusted.

This slowdown follows robust growth in the second half of 2023. The primary factors behind the reduced growth rate include a decline in investments and fiscal spending, despite continued, albeit weakened, household demand and export growth. Consumer spending, measured by real domestic trade, grew by 3.3% year-on-year in the first quarter, a significant drop from the 15.1% growth observed in the fourth quarter of 2023.

Inflation Trends

Inflation in Kazakhstan has slowed but remains above the target. Headline inflation fell from 9.1% in March to 8.7% in April year-on-year. Prices for both food and non-food goods have decreased from previous peaks, but services inflation has increased to 13.5% year-on-year.

The rise in services prices, which tend to adjust more slowly than goods prices, likely reflects broader increases in labor and other costs.

Bank Lending and Household

Household loan growth continued to be robust, while credit demand from firms remains subdued. In April, consumer credit grew by 25.2% year-on-year in real terms, and mortgages increased by 5.5%, making up nearly 85% of total credit growth. Credit to firms grew at a modest 3.9% year-on-year.

Fiscal Policy and Budget Spending

In the first quarter of 2024, Kazakhstan's government revenue slightly declined by 0.9% year-on-year to $12.7 billion, driven by stable global oil prices and domestic crude production. Non-oil revenue rose by 3.1% year-on-year to $9.6 billion, supported by significant increases in income tax (+48.4%), social tax (+45.6%), and excise tax (+5.4%).