Balance of Payments -- Kazakhstan Macroeconomic Performance

Trade balance

During the 1Q98 the Kazak trade balance was positive after quite a significant deficit throughout 2-4Q97. Exports and imports with non-CIS countries accounted for 52.5% and 50.2% respectively. However, Russia still has the largest share of exports (30.7%) and imports (42.8%).

Exports

During the 1H98 there was a decrease in exports due to declining world prices for crude oil and metals. Despite falling prices (a -38.7% change in the 1Q98 vs 1Q97), the volume of exports of crude oil increased 2.1 times (see table below, which shows the percentage change in volume and prices of major items of exports).

	Volume	Prices
Steel	+6.3	+7.6
Other non precious metals	+45.6	+15.4
Oil, fuel and petroleum products	+210.0	-38.7
Copper	+5.9	-27.1
Precious metals	+68.6	-41.3
Lead	+270.0	-32.9
Zinc	+210.0	-8.2
Nickel	-98.5	+350
Wheat	-22.0	-28.1
Cotton	-51.4	-0.1

Current account

Kazakhstan’s fragile current account surplus (USD 39.3 million in the 1Q98) was achieved after a number of years with a negative balance. A positive trade balance and current transfers were the major factors in achieving a current account surplus. Due to deteriorating terms of trade, the government estimates a negative trade balance and consequently, a current account deficit for the 1H98; the trend is likely to remain until the end of 1998.

Capital account

A significant capital account surplus in the 1Q98 (USD 257.9 million) was achieved mainly due to the inflow of direct investment (USD 141.6 million) and loans (USD 111.4 million). In the 2Q98 there was an increase in portfolio investment (USD 100 million) after the debut issue of eurobonds by Kazkommertsbank. Almost all of the transactions made into the capital account were by non-CIS countries and are, therefore, less prone to fluctuations in response to the Russian financial crisis. It is still unclear whether or not the NBK has already included in the 1998 projections the anticipated eurobond issue, which was initially scheduled for the 4Q98 (USD 500 million). The most recent statements made by the NBK Chairman indicate are almost two-fold increase in capital account surplus by the end of 1998.

investment, USD million

Source: National Bank of Kazakhstan

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