GDP growth slows in the second quarter

Softer H2 growth this year compared to last: A second national accounts release confirmed that the Kazakh economy lost traction in Q2, as GDP growth moderated to 3.2% year on year in January–June from Q1’s 3.8% expansion. H2’s reading was a far cry from the 5.3% increase recorded in January–June 2023.

Private spending and fixed investment drag on momentum: Domestically, the slowdown reflected deteriorations in private spending and fixed investment. Private consumption rose 5.6% in January–June, slowing from the first quarter's 7.0% expansion. Moreover, fixed investment swung into contraction, declining 0.4% in H2 (Q1: +3.3% yoy) and marking the worst result since H2 2020. More positively, government consumption slid at a softer pace of 5.2% in January–June (Q1: -6.7% yoy). On the external front, exports of goods and services bounced back, growing 1.2% in H2 (Q1: -1.7% yoy). In addition, imports of goods and services declined at a more moderate rate of 3.4% in the same six-month period (Q1: -6.3% yoy).

Economy to gain traction by year-end and further in 2025: Our panel expects the economy to have gained momentum in Q3, aided by lower inflation and ongoing monetary easing boosting domestic demand, while robust oil output and gold demand will have continued to drive a recovery in exports. Though our Consensus is for economic growth to slow overall in 2024 from 2023’s level, GDP growth should gain traction in 2025.

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