Kazakhstan's Gross Domestic Product (GDP) shrunk by 1.5% in the first quarter of 2021, according to the latest official figures published by the Bureau of National Statistics.
The figure is very slightly different from the preliminary results published earlier, which showed that GDP contracted by 1.6%, compared to the 2.7% growth in the same period of 2020. Transport and warehousing plunged 17.4% while trade shrank 2.7%. At the opposite end of the scale, industrial output ticked up 0.1% construction surged 13.1%, and agriculture, forestry and fisheries advanced 2.8%.
“In terms of GDP by production, the main factors behind the improvement were industrial output (up 0.2% y-o-y versus a 1.9% decline in 4Q20), accommodation and food services (down 10.7% in 1Q21 versus a 35.4% drop in 4Q20) and public administration (up 12.9% versus a 1.9% decline in 4Q20),” Moscow-based Sberbank CIB said in a note.
“Transportation and storage shrank by 17.4% in 1Q21, though the sector's weight in GDP was reduced in 1Q20, meaning that it made a smaller contribution to the GDP figures for 1Q21. Financial services deteriorated, growing 0.5% in 1Q21 following 9.2% growth in 4Q20, as did real estate (-3.9% versus 1.5% growth).”
In 2020, Kazakhstan's the economy was down 2.6%. The services sector dropped 5.6% last year, leading the fall in GDP, impacted by lockdown measures imposed in March-May and July-August. Industrial output also deteriorated, dropping 0.4%, down from the 0.2% logged in Q1–Q3.
Notably, the construction sector gained stream, expanding 11.2% (January–September: +10.5%). The agricultural sector also gained momentum, growing 5.6% (January–September: +5.0%). The economy was also likely hit by falling demand for energy and reduced world oil prices.
In March, the World Bank said that it projected “3%-4%” growth in 2021. It also saw significant downside risks due to the uneven worldwide economic recovery and higher debt-related risks on global financial markets.
Analysts surveyed by Focus Economics see the Central Asian nation's economy expanding 3.7% in 2021 and 4.6% in 2022. They also expect inflation to end 2021 at 6.1% and 5.4% in 2022.
Kazakhstan’s annual inflation rate stood at 7.2 percent in May of 2021 from 7.0% in the previous month. It was the fastest increase in consumer prices since February, driven by costs of non-food products and services.
Kazakhstan has a land area equal to that of Western Europe and strategically, it links the large and fast-growing markets of China and South Asia with those of Russia and Western Europe by road, rail, and a port on the Caspian Sea.