Kazakhstan’s GDP grew by double-digit figures in 2000-01 and by average 8% per year in 2002-07 - largely due to its booming energy sector, but also due to continuous economic reforms, good harvests, and high inflows of foreign direct investments.
Over this period, the general economic situation in Kazakhstan has improved, leading to a strong growth of imports. High oil prices have boosted the current account and balance of payments which moved into surplus and increased foreign exchange reserves. Between 1992 and 2007, Kazakhstan has attracted more than $39 billion in foreign direct investment (excluding investment in shares) and in 2007 Kazakhstan’s GDP was $102 billion. Inflation was 10.8% in 2007. Rapid economic growth has helped stimulate employment and raised living standards. Unemployment fell from 13.5% in 1999 to 7.8% in 2006.
Graph 1. Kazakhstan’s GDP compared to peers
Graph 2. Kazakhstan’s GDP composition
The Kazakh economy also benefits from a significant cushion - the National Fund for the Republic of Kazakhstan (the ‘‘NFRK''), a professionally-managed fund that aggregates above-target tax receipts and a share of revenues from the energy sector with an eye to a time when oil revenue slows or stops.
Established in 2000, the NFRK is intended to support future state budgets. As at the end of 2007, the NFRK's funds constituted KZT 2,735,815 billion(approximately US$ 22, bln.). These funds are intended to be available in the future, should they be needed, to meet budgetary operational expenditures, including debt servicing.
Graph 3. Foreign reserves
In September 2002, Kazakhstan became one of the first countries in the former Soviet Union to receive an investment-grade credit rating from a major international credit rating agency, when Moody's rated Kazakhstan's foreign currency bonds and notes at Baa3. In 2007, Fitch rated Kazakhstan's sovereign rating as BBB+ and Standard & Poor's BBB-. As at the end of 2007, Kazakhstan's gross foreign debt was approximately $93.9 billion.
Table 1. Main economic indicators