Economic activity reportedly soared in December, albeit quite unexpectedly

KAZAKHSTAN - In Brief 16 Jan 2025 by Evgeny Gavrilenkov

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The Bureau of National Statistics announced that in 2024, the short-term indicator (that takes into account activity in industry, agriculture, construction, trade, transportation, and communications) soared to 6.2%. In 11M24, it was up by 5.6%, implying a rapid acceleration in December alone. Meanwhile, in 9M24, it was up by 5.3% y-o-y, and in 1H24, it grew by 3.9% y-o-y. As the Bureau stopped publishing short-term indicator y-o-y and m-o-m statistics for individual months several years ago, it is difficult to verify the growth rate for cumulative periods. Meanwhile, the officially published quarterly GDP statistics also lack data for individual quarters. Only incremental data are available. So far, in 1Q24, GDP grew by y-o-y 3.8%. In 1H24, it was up by 3.2% y-o-y. In 9M24, growth reportedly accelerated to 4.1% y-o-y. The officially reported 6.2% growth of the short-term indicator could mean that GDP grew by 5.0% or even more. If these figures are correct, an obvious question arises – is this growth sustainable or not? Agriculture contributed strongly to this growth as it increased by 13.7% y-o-y in 2024 amid a base effect, i.e., an extremely poor harvest in 2023. Apart from that, it looks as though economic growth could have accelerated due to increased budgetary spending. We mentioned previously that this spending was amended in mid-year. On top of that, a significant portion of it was delayed due to a lack of financing. Spending started to catch up with the amended plan in 4Q24 after the government decided to unlock more reserves. Another reason for an acceleration could have been expanding domestic credit. Therefore, it could explain soaring retail sales in 2024 – ...