Inflation could be higher if further depreciation of the Kazakh and Russian Federation currencies causes the som to weaken. If prices rise as projected, the central bank will likely raise interest rates over the next few years. It will likely maintain a flexible exchange rate policy, intervening less often to smooth exchange rate volatility, the ADB said in its Asian Development Outlook 2017.

The fiscal deficit is projected to narrow to the equivalent of 3.0% of GDP in 2017 and 2.5% in 2018 as the government strives to restrain expenditure, despite a presidential election in November 2017, and to boost revenue by reforming tax policy and administration, the Bank said.

Tax receipts could be higher if EEU accession yields more customs revenue than now forecast. The current account deficit is forecast to widen to 13.0% in 2017 and 13.5% in 2018, reflecting some improvement in trade with the EEU and signifi cantly lower exports to countries outside the EEU, notably the People’s Republic of China (PRC).

Source: akipress.org

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“Growth is projected to slow to 3.0% in 2017 because of a high base in 2016 and an expected decline in output from Kumtor, the main gold mine. It is expected to recover to 3.5% in 2018 with some improvement in the domestic economy and higher growth in the country’s main regional partners, Kazakhstan and the Russian Federation,” the Bank said.

“Strong performance in gold mining and trade overcame an early slump to bring 3.8% expansion in 2016. Currency appreciation and higher remittances curbed inflation and the current account deficit. Growth is projected to slow to 3.0% in 2017 before recovering to 3.5% in 2018 with faster regional growth. Higher inflation and a wider current account deficit are likely. Eurasian Economic Union membership poses both challenges and opportunities,” the Bank said.

Growth slowed marginally to 3.8% in 2016 from 3.9% in 2015 as strong performance in gold mining and trade offset a slowdown in manufacturing, as well as spillover from recession in the  Russian Federation and slower growth in Kazakhstan.

Source: akipress.org

Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.