Economic growth faster than expected
Overview:
Kazakhstan felt the full effects of the global financial crisis earlier than most given that its banking sector was over-exposed to short-term external debt. On the other hand, the presence of the National Oil Fund (worth over 20% of GDP) gives it a massive reserve on which to draw in difficult times. The authorities have made sensible use of this facility as they have tried to work through the considerable challenges posed by bank vulnerability. Progress here is now being assisted by faster than expected growth both last year and in early 2010. A strong last quarter allowed GDP growth to remain positive in 2009 despite expectations of a negative outcome. Likewise, the GDP reading for Q1 was strong. The current account also recorded a large surplus in the first quarter giving support to the currency and FX reserves.