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ADB: Kazakhstan Outlook for 2012

Good oil sector performance and sizable public investment contributed to robust expansion and a strong balance of payments in 2011. Growth is forecast to moderate in 2012, reflecting the slowdown expected in Europe and the Russian Federation, before recovering somewhat in 2013 as the world economy strengthens. Structurally, the economy remains dependent on oil production and constrained by financial sector weakness. Over time growth will depend on the success of the government’s diversification efforts, largely funded by oil earnings.

Economic growth is projected to slow to 6.0% in 2012, reflecting the expected slowdown in the eurozone and the Russian Federation. It should accelerate to 6.5% in 2013, as the world economy strengthens. Growth could turn out slower if prospects for oil and other commodities worsen, the world outlook deteriorates, or domestic demand is weaker than expected.

Sizable investments under the Accelerated Program should boost manufacturing and construction, while an expected resurgence of mineral prices and minimal decline in oil prices is seen encouraging growth in petroleum and mining. Implementation of the Accelerated Program, supplemented by other programs aimed at improving infrastructure and productivity, and at promoting industrial and social modernization, are likely to support growth by easing bottlenecks and boosting domestic producers’ competitiveness.