Leading indicator of economy (6 months of 2023)
According to the data for the first half of the year, the economy grew by 5%, while the short-term economy indicator - by 5.6%. The widening of the difference between the short-term economic indicator and GDP data occurred as a result of the economic downturn in professional activity fields, real estate transactions and public administration and defence. Cyclical industries continue to be the main economic drivers, growing by double-digit values due to the increased government spending, growing consumer activity and the implementation of infrastructure modernization plans. We expect these industries to continue to maintain high growth rates.
The industrial sector also has an additional positive impact on the economy. Thus, the mining industry grew by 15.4% compared to June last year as a result of the base effect. Considering that last year the problems at CPC and Kashagan continued until November, we should expect the development of this industry at high levels by the end of the year.
Thus, the previously observed trends persist and the economy continues to be in the overheating zone.
Given the above, we expect the economy to maintain high growth rates in the range of 4.7-5.0% next month, followed by a slight decline to 4.5-4.8% at the end of the year. This will also be affected by improving business conditions, good demand for goods and services from the population, a boom in the construction industry and a stable situation in foreign markets.
However, there are still risks from the deterioration of the geopolitical situation, falling oil prices due to insufficient demand and accelerated price growth within the country.
We expect annual economic growth at the level of 3.9-4.2% from 2024. One of the main engines of such growth will be the hydrocarbon sector due to the expansion of oil fields and an increase in oil production, alternative routes in supply chains, as well as the introduction of new production facilities as part of the national development plan implementations.