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Kazakhstan: Government and National Bank announce forecast for 2006

Government and National Bank announced their macroeconomic prognosis for 2006.

Government and National Bank announced their macroeconomic prognosis for 2006. The GDP growth is expected at 8.3% year-over-year (9.4% in 2005), growth of industrial production will accelerate from 4.6% y/y in 2005 to 7.3% y/y in 2006. In agriculture the increase of output will decelerate significantly to 2% y/y in 2006 compared to 6.7% in 2005, and the capital investment advance is forecast to drop by 4.1 percentage points y/y to 18% in 2006. The value of exports is seen at US$29.1 billion (US$27.8 billion in 2005), while imports are expected to reach US$23.1 billion compared to US$17.4 billion in 2005.

This means that the foreign trade surplus will be lower than last year. The authorities forecast that the annual average inflation will be in the 5.7 – 7.3% range, which means a deceleration from the 2005 indicator, which was 7.6% y/y. We consider that target is possible to achieve, but the government needs to implement measures to curb inflation, which already made up 2.5% eop last month. Budget deficit is estimated at 1.4% GDP and the real wages are expected to rise by 7.8% in 2006. 

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