Kazakhstan drafts economic outlook based on US $ 35 Brent

Kazakhstan’s economy ministry has based its medium-term economic outlook on a Brent crude price of US $ 35 per barrel, it said yesterday, implying reduced earnings from oil and gas exports and putting pressure on the tenge exchange rate.

The tenge would average 360 per dollar in 2017-2019 under such a scenario, the ministry said in a presentation, compared with a prevailing rate of 338.86 per dollar.

The Kazakh currency has lost nearly half of its value against the dollar since last August when the authorities in the Central Asian nation abandoned their pegged exchange rate policy due to the oil price slump.

The tenge will begin strengthening alongside oil prices in 2020-2021, according to government forecasts.

Based on the same crude price assumption, oil output would increase to 79.5 million tonnes next year from 75.5 million tonnes expected this year, the economy ministry said.

This will include 4.0 million tonnes from Kashagan, the mammoth offshore field due to start commercial production next month after years of delays and technical problems.

In 2020, the ministry expects Kashagan’s output to plateau at 13.0 million tonnes while the country’s total production will reach 86.5 million tonnes.

Kazakhstan’s gross domestic product growth will accelerate to 1.9 percent next year from 0.5 percent this year, according to the outlook, and continue strengthening to reach 3.1 percent in 2021.