GDP -- Kazakhstan Macroeconomic Performance

GDP growth

The GDP grew at 2.2% in the 1H98 as compared to the 1H97 and reached USD 10.9 billion. There were significant positive changes in the 1H98 GDP structure: the share of agricultural and industrial output in the Kazak GDP fell whereas the share of services and construction grew. Within these six months, the growth of construction was especially significant in the 2Q98, due to accelerated construction in the new capital, Astana.

GDP	1H97	1H98
Production of goods	33.5	30.8
Agriculture	4.8	3.8
Industry	25.6	23.4
Construction	3.1	3.6
Services	61.7	64.3
Transportation & Communications	11.3	11.2
Other services	32.3	34.9
Gross Value Added	95.2	95.1
Net Taxes on products & imports	4.8	4.9

Industry

The National Statistics Committee reported growth in the output of the mining sector (3.6%, 1H98 as compared to the 1H97) due to the growth in: primary metals processing (11.8%), natural gas extraction (13.8%), mining of the ore of non-ferrous metals (11.0%), and crude oil output (2.1%).

Oil output	Crude oil output in Jan-July 1998 declined from 65,900 tonnes per day in January to 57,700 tonnes in July. The most dramatic output decline was observed in Mangistau oblast but other regions (Atyrau and Western Kazakhstan) also contributed to a fall in crude oil output. Moreover, due to the persistent problems at the Atyrau Oil Refinery, the output of the petroleum products also fell.
Metals	Positive trends were observed in the metals mining sector where the extraction of non-ferrous metals’ ore increased by 6.6%, especially copper ore (3.1%), zinc concentrate (14.4%), and lead concentrate (13.4%). In the same period, there was a significant increase in non-ferrous metal processing despite a sharp decrease in the steel sector. The crisis in the countries of Southeast Asia, which were Kazakhstan’s major consumers of steel products, has negatively affected the Kazak steel sector: both ferrous alloys and rolled steel production suffered from the shrinking demand.
Investment in capital formation	Total investment in capital formation consisted of USD 844.9 million in the 1H98, with two clear priorities: construction in the new capital Astana and new construction in the oil rich Atyrau region (25.7% and 27.4% of the total investment, respectively).

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© Kazkommerts Securities 1998. Please cite source when quoting.

This report has been prepared by Kazkommerts Securities and provided solely for information purposes to recipients only. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. This information does not constitute an offer to buy or sell securities. Kazkommerts Securities or its affiliated persons may be buying, selling or holding long or short positions, acting as investment bankers, be represented on the Board of the issuers in securities mentioned herein. This report is not intended for the use of private investors. Investment in Kazakhstan markets is an extremely risky activity and many persons, physical and legal, may be completely or partially restricted from dealing in the Kazakhstan securities markets.

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