Cross-border remittances and the influx of migrants in the countries of Central Asia, including Kazakhstan, will significantly decrease in 2023 compared to 2022, according to the May macroeconomic review of the International Monetary Fund for the Middle East and Central Asia, Kursiv.kz reports.
“Cross-border transfers and the influx of migrants are expected to slow down significantly in 2023 compared to 2022. As a result, the reduction in remittances and exports of services will lead to a deterioration in the current account balances of developing countries and countries with economies in transition (by an average of 1.5% and 3% of GDP, respectively),” the document says.
According to the National Bank of Kazakhstan, in 2022, 357 billion tenge ($775.4 million) were transferred from Russia, which was a record for at least the last eight years for which statistics are available.
According to IMF analysts, the decline in oil prices will further weaken the current account balance of oil-exporting countries by an average of 5.4% of GDP.
However, the fund still expects Kazakhstan's GDP to grow by 4.3% in 2023 as oil production normalizes and the expansion of the Tengiz oil field comes online.
In addition, the IMF notes that inflationary pressure in Kazakhstan will remain elevated against the backdrop of high wage growth. At the same time, a significant import of inflation from Russia remains in the republic against the background of the devaluation of the ruble by more than 20%. They also drew attention to the fact that since the beginning of the war in Ukraine, a number of countries, including Armenia, Georgia, Tajikistan and Uzbekistan, have increased bilateral trade with Russia.
In April, the IMF lowered its forecast for Kazakhstan's economic growth in 2023 to 4.3% from the previously expected 4.4%. In 2024, the IMF predicts GDP growth at 4.9%, in 2028 - 2.8%.
According to IMF forecasts, inflation in Kazakhstan by the end of the current year will be 14.8% (according to a similar forecast in October 2022 - 11.3%). At the end of 2024 and 2028, inflation in Kazakhstan is expected to be at the level of 8.5% and 4.7%, respectively. In 2022, inflation was 20.3%.
The deficit of the current account of the balance of payments of Kazakhstan for 2023 is projected by the fund at the level of 1.9% of GDP, for 2024 - 2% of GDP, for 2028 - 3.1% of GDP. At the end of 2022, Kazakhstan's GDP growth amounted to 3.1%. President Kassym-Jomart Tokayev set to bring economic growth in the republic to a level of at least 4%.
CentralasianLIGHT.org
May 11, 2023