Kazakhstan's GDP growth to slow, reforms needed: IMF

Kazakhstan's economic growth is set to slow in the medium term, the International Monetary Fund said in its latest review of the Central Asian state's economy, urging the government to bolster growth by structural reforms.
"Real GDP growth is projected to average about 7.5 percent a year over the medium term," the Fund said in a survey based on consultations with Kazakhstan's government and posted on its official website www.imf.org.
Kazakh gross domestic product growth is officially targeted at 8.0 percent this year after a 9.4 percent rise in 2004.
"Economic activity is expected to remain buoyant in 2005, despite some moderation in GDP growth on account of deceleration in the pace of oil production coming onstream," the IMF said, giving the same forecast of 8.0 percent growth this year.
The Fund said it expected GDP growth to slow to 7.7 percent next year, 7.2 percent in 2007 and 6.9 percent in 2008.
Kazakhstan, a vast steppe nation of 15 million, which sprawls across both Europe and Asia, is viewed as the most successful economy of the post-Soviet Commonwealth of Independent States. It pins hopes of future prosperity on its mammoth oil reserves.
It aspires to join the world's superleague of oil producers by 2015 by boosting its oil output to 3.5 million barrels per day from today's 1.3 million bpd.
"Driven by an expansion in hydrocarbon production, real GDP grew at an average rate of 10.5 percent a year, while employment - which had declined sharply in the 1990s - recovered," the Fund said, referring to performance in the last five years.
The current share of hydrocarbons in the Kazakh economy could be as high as 15 percent, the IMF said, noting that the share of crude oil and natural gas output in industrial output had almost tripled since 1998, reaching 45 percent in 2004.
Oil and gas export accounted for over 55 percent of total export earnings last year.
But Kazakhstan, which has put in place key reforms, should not rest on its laurels, reaping momentary benefits from high world prices for its abundant oil riches, the Fund cautioned.