The World Bank publishes a monthly economic report for Kazakhstan

The World Bank has released monthly economic data for Kazakhstan for May, covering changes in economic activity, inflation and bank lending.

"Real gross domestic product (GDP) grew by a modest 0.7% (seasonally adjusted) in the first quarter, compared with a steady quarterly average of 1.2% through 2023, driven by the previously reported dampening effect of investment and fiscal costs," says the report.

Consumer price inflation slowed to 8.5% year-on-year in May, compared to 8.7% in April, on the back of lower domestic demand. In May, monthly inflation slowed for the third month in a row to 0.4% compared to the previous month.

Food and non-food prices have slowed, the report said, while prices for services are likely to catch up with higher costs associated with steady real wage growth.

The trade surplus rose 9% year-on-year to US$5.7 billion in the first quarter, mainly due to lower imports. Due to low domestic demand, imports in the first quarter decreased by 7% compared to the same period last year. Exports of goods decreased by 2.6%, mainly due to a decrease in exports of chemical products and machinery and equipment.

Real lending rates (adjusted for inflation) to both businesses and households rose to 8.4% and 11.1% in April, as prime rates held steady, deposit rates fell and inflation eased. These rates are well above pre-pandemic levels, boosting banks' net interest margins and profits.