Kazakhstans economy contracted by more than 1 percent in January compared to a year ago as the deepening financial crisis tightened its grip on Central Asias biggest economy, the government said on Wednesday.
Kazakhstans oil-fuelled economy nose-dived sharply because of falling demand for its key commodity exports as well as turmoil in the banking sector which has forced the government to allocate $25 billion to rescue the troubled economy.
The government said it would take firmer control of the economy to steer it through the crisis, before reverting to more market-orientated principles when the outlook improves.
Prime Minister Karim Masimov, in a speech to parliament, said the former Soviet republic officially registered in January its first contraction since the crisis began.
"According to preliminary data GDP (gross domestic product) shrank 1.2 percent in January," he told lawmakers. His adviser said the number reflected the change in output compared to January 2008. Gross domestic product in the vast resource-rich nation east of the Caspian Sea grew 3.2 percent last year, and expanded at an average rate of about 10 percent in 2000-2007.