In terms of economic indicators, Kazakhstan is the most profitable and successful country in Central Asia. It is among the ten largest financial powers in Europe. The main sources of income are oil and mineral mining, as well as engineering and metal industry. It is noteworthy that Kazakhstan is almost the only country on the continent in which agriculture develops and flourishes at an incredible pace.
Economic development
After the collapse of the USSR, a significant financial recession was observed in the republic, which lasted until 1995. At that time, the economy was on the verge of high inflation. The expenditure side of the budget significantly exceeded the revenue side. There was an imbalance in pricing policy. The authorities could not find leverage over the monopolism of producers. All this led to a sharp increase in prices and unemployment. The credit system was just beginning to emerge.
In 1993, the national currency was introduced on the territory of Kazakhstan, which was called "tenge". Artificial stabilization of the exchange rate led to the collapse of production and inflation. So, the decline in GDP amounted to more than 9%. In 1995, a credit system was established. Such a monetary policy was able to curb hyperinflation up to 60%.
In 2007, there was a sharp increase in Kazakhstan's GDP by almost 30%. From this moment on, this indicator only increased. In recent years, GDP growth has slowed slightly. The main reason for this is the instability of the global macroeconomics. An effective domestic policy helps normalize the general financial background. Also, a significant share of budget revenues is the profit from high yields.
Economic indicators
The maximum devaluation threshold in the entire history of Kazakhstan was observed in 1999. Then this figure was about 59%. The reason for the devaluation was the final stage of the transition to tenge. In 2009, the price drop rate stopped at 17%.
As for the inflation rate, in the early 1990s it amounted to about 210%. Subsequently, the economic background within the country was stabilized by the national currency. The minimum inflation rate was observed in 1998 - 1.9%. Recently, the indicator does not exceed 6%.
Kazakhstan's external debt ranges from $ 150 billion. The amount is growing every year. A few years ago, debt amounted to about $ 108 billion.
Industry characteristic
One of the main profitable industries is engineering. Profit from this field of activity is slightly less than 8% of Kazakhstan's GDP. Local manufacturers produce equipment for the mining industry, the transport industry. In 2012 alone, more than 12 thousand Kazakh cars entered the world market.
Ferrous metallurgy accounts for 13% of the country's total GDP. Up to 8 billion tons of iron ore is mined and processed by Kazakhstan factories annually. Non-ferrous metallurgy is in no way inferior to ferrous in terms of the specific share in GDP. Its ratio is 12%. Most metallurgical plants process aluminum, zinc, lead and copper. More narrow production - magnesium, titanium and other rare ores.
Today, Kazakhstan is one of the main copper exporters in the world. Most of the products are bought by Germany and Italy. In addition, about 170 gold deposits are registered in the country.
No wonder the structure of Kazakhstan’s GDP is based on industry. Take even the chemical industry. In the production of phosphorus and synthetic substances, Kazakhstan is in third place in Eurasia. Petrochemical enterprises produce a wide range of various technical substances, such as kerosene, boiler and diesel fuel, gasoline, etc.
In addition, the republic has a well-established production of building materials: slate, cement, pipes, linoleum, faience, tiles, kaolin, convectors, radiators, gravel, etc. This industry occupies 4% of the country's GDP. Recently, the development of the energy sector has been taking great steps.
Agricultural Profitability
The share of Kazakhstan’s GDP allocated to this type of activity is more than 5%. In recent years, this figure has risen sharply. Back in the mid-1990s, agriculture accounted for only 1.8% of total GDP. Since 2002, billions of dollars have been directed towards the development of this industry.
The most important component of the local "agricultural" is the cultivation of potatoes, oilseeds and melons. The total yield over the past 10 years has grown 6 times. It will be worthwhile to note an increase in profits from the sale of fruits and vegetables. Of the crops, wheat, barley and oats are considered the most profitable. In the west of the republic, corn and sunflower crops are widespread.
In cattle breeding negative dynamics are noted. In recent years, the stock has declined by almost half.
Foreign trade indicators
The first thing that affects Kazakhstan’s GDP is export. The main trading partners of the republic are the Baltic countries and the CIS. They account for about 59% of total exports. The first place in the list is Russia. Trade relations are also developing successfully with foreign countries such as Germany, the Czech Republic, Turkey, Italy, Switzerland, the USA, England, and South Korea.
The annual turnover between Kazakhstan and Russia is about $ 30 billion. Most of the exports are petroleum products, followed by metals and ores. It is noteworthy that only 20% is allocated to all other sectors of production and services.
The main products of import are crude oil, equipment, transport, weapons, food products.
Financial system
The average level of Kazakhstan’s GDP is growing every year. Such a positive trend is achieved thanks to an effective internal financial system. Back in 1998, a large-scale pension reform was carried out in the country. At the next stage, the stock market underwent a change. By mid-2014, 38 national banks were already operating in the country.
It is worth noting that all significant financial transactions are carefully checked by the relevant State Committees and services. The economic system in Kazakhstan is under the strict supervision of the authorities.
The most serious financial crisis in the republic happened in 2008. However, the decline in GDP lasted only two reporting quarters.
The economic growth
The year 2014 was marked for the country by a serious slowdown in the process of supply and demand. As a result of this, the negative dynamics of Kazakhstan's GDP was observed. This indicator fell from 6% to 4%. This was also due to the instability of the global oil industry. There was also a negative trend in demand for metallurgical products from Russia and China. All this negatively affected not only Kazakhstan's GDP, but also the entire credit system.
To normalize the country's macroeconomics, the authorities decided to conduct a stimulating tax policy. In addition, after the depreciation of the tenge, the Government of Kazakhstan aimed to maintain social articles and industry of more than 5.5 billion dollars.
Financial reforms
To date, the Government of the Republic is trying to prevent the negative impact of a slowdown in economic growth on the labor market. Otherwise, this will lead to the bankruptcy of small businesses and will directly affect the most vulnerable categories of citizens.
For the artificial stabilization of the economy and the level of GDP in the country, various social programs come into force. Funding comes from the National Fund and from a partial redistribution of public funds.
Among other reforms, a new package of measures to attract foreign investors and support small businesses should be highlighted.
Prospects and risks
Recently, there has been a negative change in Kazakhstan's GDP. Improvement of the situation is forecasted only in 2017. As of 2014, GDP growth stopped at 4.1%. The dynamics of the development of this indicator will fall every day until the global economic environment finds stabilization levers.
The geopolitical tensions in the regions also affect Kazakhstan’s internal financial risks. The most negative factor in reducing the level of GDP of the republic is the conflict between Russia and Ukraine. Because of this, it is very difficult to find stable investors for the long term.
