This week, the National Bank of Kazakhstan published the "Financial Stability Report of Kazakhstan"—a document analyzing systemic risks and growth factors not only for the country’s financial system but also for its economy, reports Zakon.kz.
The regulator notes that 2023 was a turning point for all sectors of Kazakhstan's economy. The most important achievement was the mitigation of risk factors affecting financial stability. Imbalances in the financial system decreased throughout the year, although the growth rate of lending slowed.
"In 2023, Kazakhstan experienced significant economic growth of 5.1%, along with a reduction in inflation to 9.8%. The impact of external factors on the volatility of the tenge exchange rate was limited," the Financial Stability Report states.
The experts at the National Bank of Kazakhstan (NBK) consider the gradual but steady recovery of real income growth for the population to be the most important development. However, the report notes that household spending growth, adjusted for inflation, was low in 2023. This observation suggests an increase in the population’s propensity to save, aided by the NBK’s tight monetary policy aimed at encouraging savings and reducing inflationary pressure. As inflationary pressure eased, real incomes recovered, growing by 3.7% compared to the end of 2022.
No significant changes were observed in the structure of household income. The share of income from employment remained stable at around 65% throughout the year. The share of social transfers in the income structure continued to decline, reaching 21% by the end of the year. This trend can be explained by a reduction in welfare payments and other support measures, which were introduced to help citizens who lost income during the pandemic. Additionally, the share of other types of income increased by 1.1% over the year.
In Kazakhstan's housing market, there has been a lull. Prices for new homes showed slight growth, while prices in the secondary market decreased. As a result, despite a significant reduction in preferential programs, prices remained stable overall, with falling market activity—the number of purchase and sale transactions declined by 20.5% over the year.
An important factor: the volume of market mortgage loans in the country increased significantly from 15.5% in 2022 to 34.6% in 2023.
The report includes international statistics and forecasts. According to the IMF, Kazakhstan's economy is expected to maintain moderate growth of 4.0% in 2024. Constraining factors include a 17% decline in oil prices and a slowdown in global economic growth.
The sectors showing the most growth are:
- Construction (13.3%),
- Wholesale and retail trade, repair of motor vehicles and motorcycles (11.3%),
- Information and communication (7.1%),
- Transportation and warehousing (7.1%),
- Accommodation and food services (6.5%).
Negative dynamics were observed in the agriculture sector, which declined by 7.7% in 2023 (compared to 9.1% growth in 2022).
Kazakhstan's inflation rate halved from the beginning of the year, reaching 9.8% in December 2023 (compared to 20.3% at the end of 2022). Food prices increased by 8.5% over the year, non-food items by 9.1%, and paid services by 12.4%.
Lending to individuals continues to grow rapidly, primarily driven by unsecured consumer loans. The quality of the retail loan portfolio remains high, but the intense growth presents a risk accumulation factor. According to the National Bank, the overall retail portfolio grew by 26.7% in 2023, with about two-thirds of the growth coming from unsecured loans.
Earlier, we reported that Kazakhstan's net international reserves reached an absolute 10-year high, amounting to $103.1 billion.
CentralasianLIGHT.org
September 12, 2024