January 11, 2011 / 10:54 AM / 8 years ago

UPDATE 1-Kazakh c.bank sees 5-6 pct GDP growth in 2011

* Higher than latest official f’cast of 3.1 pct

* Tenge trading corridor to end March 20

* C.bank head expects stable tenge

(Adds details, quotes, background)

By Olga Orininskaya

ALMATY, Jan 11 (Reuters) - Kazakhstan’s central bank on Tuesday forecast that Central Asia’s largest economy would grow by between 5 percent and 6 percent this year, higher than the latest official government forecast for 2011.

Grigory Marchenko, chairman of the central bank, also said he expected Kazakhstan’s tenge currency to be stable against the dollar after its trading corridor is removed on March 20, provided there are no sharp fluctuations in commodity prices.

“We think the situation in 2011 will be similar to that in 2010,” Marchenko told a news conference.

Kazakhstan’s economy, among the first and hardest hit by the global financial crisis, rebounded last year thanks to higher prices for its main exports: oil, metals and grain. Several Kazakh banks have also managed to restructure defaulted debt.

While official data for 2010 has not yet been published, Prime Minister Karim Masimov on Tuesday reiterated his earlier forecast that the economy had grown 7.0 percent in the 12 months just ended. Gross domestic product grew 1.2 percent in 2009.

Data published by Kazakhstan’s state statistics agency on Monday showed industrial production rose 10.0 percent in 2010 versus 1.7 percent in the preceding 12 months.

Marchenko’s forecast for 2011 GDP growth is higher than the 3.1 percent previously forecast by the government and closer to the 4.5-5.0 percent expansion estimated by the International Monetary Fund [ID:nLDE6B81CB].

The central bank also forecasts that annual inflation, which reached 7.8 percent in 2010, will remain within a range of 6 percent to 8 percent in each of the next five years.

“If grain prices are in the region of $230-250 (a tonne) and oil prices at $80-85 a barrel, that would suit the country as a whole, as exporters would be happy and there would be no inflationary pressure from these commodities,” Marchenko said.

Kazakhstan plans to return its tenge currency KZT= to a managed float on March 20 by removing a trading corridor adopted to ease the economy through the economic crisis, Marchenko said.

The corridor was introduced in February 2009 after the tenge was devalued by 18 percent. Originally set at 145-155 per dollar, it was widened to 127.5-165.0 in February 2010.

“We had a wide corridor throughout 2010 and the exchange rate was stable in the region of 147.3 (tenge to the dollar), plus or minus 0.6 tenge,” Marchenko said. “There is no need for a corridor.” (Writing by Robin Paxton, editing by Catherine Evans)

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