Faster than expected economic growth
Overview:
The Kazakh economy is recovering considerably faster than anticipated posting very strong output readings so far this year. Both industrial output and exports are booming even if private sector credit growth remains weak. An improving balance of payments story supports both the stronger exchange rate peg against the US$ recently introduced and the rebuilding of foreign exchange reserves above and beyond pre-crisis levels. Fiscal policy and the National Oil Fund both played their parts in softening the impact of the economic downturn. However, the fiscal balance only recorded modest deficits and the Oil Fund has quickly been replenished. Moreover, public debt remains low. The key economic challenge remains stabilising/reducing a large external debt to GDP ratio as a result of excessive private sector borrowing.