1. АСТАНА - июль 2 0 0 9 г. THE KAZSTEM MACROECONOMICAL FORECASTING MODEL OF KAZAKHSTAN Aidarkhanova Bibigul REPUBLIC OF KAZAKHSTAN JSC “Economic Research Institute” Center for macroeconomical analysis and forecasting Department of Short-term Forecasting

3. The content of the presentation I.The main macroeconomical indicators and the influence of the world financial crisis to the economy of Kazakhstan II.The state planning and forecasting system in Kazakhstan III.The Kazakhstan KazSTEM short-term and medium-term forecasting macroeconomical model in the econometric G7 package IV.The forecasting blocks of the model and the forecasts of the main macroeconomical indicators of Kazakhstan for 2010-2014 V.“The short-term quarterly based forecast of the macroeconomical indicators of Kazakhstan for 2009” quarterly bulletin VI.III Astana Economic Forum

4. I. The Dynamics of GDP of the Kazakhstan 2000-2008

5. As it is clear from this figure, main current account components of the previous year except for the trade balance, show negative dynamics. Significant improvement of balance of current operations in 2008 was guarantied by export growth and surge in oil price. Taking into account that oil prices sharply declined, the current account in 2009 is expected to be negative (prognosis was done on basis of scenarios of $50 per barrel of Brent). Devaluation of tenge should promote some improvement of current account deficit. I. The current account of the Kazakhstan * * 2009 - forecast by the ERI

6. The analysis of the foreign investment structure in Kazakhstan shows that the most attractive sectors are: financial activity (monetary intermediation) – 32.2% of total foreign investment (FDI and portfolio), geological survey and search – 23.6%, crude oil and gas extraction – 12.9%, manufacturing, civil engineering, retail trade – 5% each. Foreign investment inclined primarily to the oil&gas sector I. Foreign investment inclined primarily to the oil & gas sector

7. II. The state planning and forecasting system in Kazakhstan A state planning system of the Republic of Kazakhstan A strategic plan of development of the Republic of Kazakhstan for 10 years. A forecasting schedule of the territory development of the country A development strategy of Kazakhstan for 2030 State programs for 5-10 years A forecast of social-economic development for 5 years Territory development programs for 5 years Strategic plans of the authorities for 5 years Development strategies for 10 years and development plans of the national managing holdings, national holdings, national companies with state share in nominal capital Industry programs Republic (local) budget for 3 years

8. III. Macroeconomic forecasting model KazSTEM *  KazSTEM macroeconomic model was designed by ERI to Kazakhstan’s economy   KazSTEM macroeconomic forecasting model is based on the econometric regressions stemming in the econometric G7 application  The model is the quarterly macroeconomic econometric model depicting the interrelations of basis macroeconomic indicators in Kazakhstan  Statistical base is constantly updated as data from official sources such as RK Statistics Agency, National Bank of Kazakhstan, Ministry of Economy and Budget Planning, other ministries’ web sites are available.  The model is designed to create forecast calculations for the short- and medium-term perspectives  Scenario variants of the forecasts depend on the changes in exogenous variables.

9. III. Modules of the forecasting model KazSTEM * Currently, the following forecasting modules are developed under the macroeconomic model of Kazakhstan: GDP by production GDP by consumptionMonetary relations module Macroeconomic forecasting model of Kazakhstan in the G7 econometrical package Fiscal relations module Social relations Balance of Payments GDP by revenues

10. IV. Forecast of GDP by production Base, optimistic, pessimistic scenarios bln. tenge Indicators 200920102011201220132014 Gross domestic product 14609.115254.015732.316875.618100.219378.1 15054.216619.818306.220131.421958.023864.4 15480.517535.219488.421663.023865.026166.4 Agriculture 925.7904.4930.5958.41008.91060.9 948.8955.11017.31071.81147.01211.7 1005.7980.61045.41102.51182.21251.7 Industry 3446.93469.73352.93612.33853.84091.4 3728.54165.94670.25116.05502.35900.7 3935.74676.95269.45881.76378.96870.9 Construction 1275.91232.31277.01405.21571.41732.5 1313.41382.51515.41708.11931.12151.0 1343.61385.21535.31736.41971.32202.5 Trade 2051.02354.22538.62780.23053.53376.1 2086.72524.62882.73292.93709.34184.9 2129.42560.12957.13394.43853.24370.4 Hotels and restaurant 168.3186.4199.9214.9231.8250.4 170.0193.8221.3251.3283.6318.3 171.7199.7232.3272.4320.6374.6 Transport 1259.01343.61372.01423.01475.81539.4 1278.81459.31559.01669.11772.01891.6 1297.51460.81576.91705.51828.81970.3 Communication 380.3368.7380.6401.3428.7461.0 384.0399.8439.6485.7535.6590.2 387.9400.9448.3509.9583.5664.6 Financial activities 773.8914.1852.7889.4951.41012.4 809.21047.51131.41264.31403.01528.5 835.61060.41174.21322.31479.21617.7 Real estate activities 2713.42932.93119.53334.73558.13781.7 2723.02949.13207.13503.83809.84119.6 2739.53087.83402.83767.54175.14617.6 Government administration 315.2339.8375.9410.0441.2471.2 316.2341.6386.7433.7478.8523.1 317.2388.5443.3499.8555.0610.0 Education 546.3510.1533.7559.1586.2615.2 548.1511.7537.4564.5593.3623.9 567.2586.6616.9649.3683.5720.2 Healthcare 283.0253.7260.8268.7277.9287.7 283.2255.8264.6273.4283.5294.0 286.4296.1308.1318.7330.9343.9

11. V. “The short-term quarterly based forecast of the macroeconomical indicators of Kazakhstan for 2009” quarterly bulletin  The Middle-term forecasting department of the Center of macroeconomical analysis and forecasting of the Economic research institute begins to publish «The short-term quarterly based forecast of the macroeconomical indicators of Kazakhstan to a 2009 year» quarterly bulletin since July the 1-st of 2009.  At September the 1-st of 2009 the №2 publication of the quarterly bulletin has been published  The structure of the bulletin includes the following sections: 1. The scenario conditions and the key hypotheses 2. The world economy 3. The world commodity markets 4. The results of forecasting and analytical calculations of the base blocks of KazSTEM model 4.1. GDP by production method 4.2. GDP by consumption method 4.3. Inflation 4.4. Monetary relations sector 5. Appendix: accuracy estimation of the forecasts of the bulletin №1  The Ministry of economy and budget planning of the Republic of Kazakhstan and other interested authorities get the quarterly bulletin.  The development of the forecasting blocks of the quarterly bulletin is being further planned.

12. V. Quarterly forecast of GDP by production to a 2009 year (to corresponding period of previous year) IndicatorsUnit Actual data BaseOptimisticPessimistic forecast 1 quarterhalf year9 monthsyear9 monthsyear9 monthsyear Gross domestic product Billion tenge 3 055.36 446.310 716.815 054.210 932.315 480.510 509.614 609.1 Real growth 97.8%97.7%98.8%99.0%99.3%99.8%98.4%98.3% Agriculture Billion tenge 82.0211.2735.9948.8775.11 005.7721.0925.7 Real growth 103.6%102.5%103.5%103.6% 103.7%103.3%103.5% Industry Billion tenge 876.91 845.92 738.03 728.52 833.23 935.72 608.83 446.9 Real growth 95.2%97.5%98.4%97.7%98.9%98.7%98.0%96.8% Construction Billion tenge 179.9449.1917.01 313.4925.71 343.6896.21 275.9 Real growth 93.4%90.2%94.5%95.1%95.4%97.0%92.4%92.6% Trade Billion tenge 445.0909.31 479.22 086.71 497.52 129.41 468.92 051.0 Real growth 94.7%96.4%97.3%96.3%98.3%97.6%96.7%95.3% Hotels and restaurant Billion tenge 38.869.9121.6170.0122.6171.7120.9168.3 Real growth 104.0%103.3%106.4%106.8%106.7%107.2%106.3%106.6% Transport Billion tenge 238.6529.8902.61 278.8912.21 297.5893.01 259.0 Real growth 95.0%88.3%89.1%91.7%89.6%92.5%88.8%91.2% Communication Billion tenge 86.2160.9220.0384.0227.0387.9215.0380.3 Real growth 104.2%103.6%106.2%103.5%106.8%104.4%105.7%102.5% Financial activities Billion tenge 188.4361.2581.3809.2584.2835.6578.8773.8 Real growth 107.1%106.7%107.6%106.6%108.1%107.4%107.1%105.8% Real estate activities Billion tenge 648.41 224.41 925.42 723.01 939.82 739.51 920.22 713.4 Real growth 103.8%102.8%104.3%104.5%104.8% 104.2%104.4% Government administration Billion tenge 70.2174.5240.1316.2240.4317.2239.7315.2 Real growth 109.3%107.3%104.5%105.2%104.6%105.4%104.4%105.0% Education Billion tenge 132.6241.1373.1548.1382.7567.2372.2546.3 Real growth 101.9% 102.1%102.2%102.3%102.7%101.9%102.0% Healthcare Billion tenge 70.0145.8213.3283.2214.4286.4213.2283.0 Real growth 99.5%103.8%101.3%102.1%101.4%103.0%101.2%101.0% Other services Billion tenge 61.4137.1231.0340.3233.5343.4230.9340.0 Real growth 103.1%104.0%102.7%101.3%102.8%101.4%102.6%101.2% FISIM Billion tenge -200.5-347.7-531.8-668.4-534.1-687.3-529.9-643.0 Real growth 107.7%108.4%109.4%107.3%109.8%107.9%109.0%106.6% Taxes on products and import Billion tenge 137.4333.9570.1792.4578.1807.0560.7773.3 Real growth 96.4%96.5%96.2%96.9%96.3%97.0%96.1%96.7%

13. V. Control of the forecast of the bulletin №1 Indicators Nominal valueShare, %Real growth, % Fact 13.08.09 Forecast 01.07. 09 Differe nce, мln.ten ge Fact 13.08.09 Forecast 01.07. 09 Differe nce Fact 13.08.09 Forecast 01.07. 09 Differe nce, % mln. tenge% GDP 6 446.36 945.5-499.2100.0 -97.7 0.0 Production of goods 2 506.22 828.4-322.239.040.7-1.796.795.61.1 Agriculture 211.2219.8-8.63.33.20.1102.5103.5 Indusrty 1 845.92 106.3-260.428.730.3-1.697.595.61.9 Construstion 449.1502.3-53.27.07.2-0.290.293.1-2.9 Production of services 3 953.94 143.5-189.661.359.71.699.799.60.1 FISIM -347.7-383.635.9-5.4-5.50.1108.4103.35.1 GVA 6112.46 588.3-475.994.9 0.097.897.70.1 Other tax 333.9357.4-23.55.1 0.096.599.7-3.2

14. The summary of current economic indicators 2008 2009 (estim) 2010 (forecast) Nominal GDP, KZT trillion16.015.116.7 in US dollars132.8100.4110.8 GDP per capita, US dollars8502.96322.86918.0 Real GDP growth, %3.22.6 Inflation, annual, %9.58.46.8 Unemployment rate, %6.67.27.1 Trade balance, US dollars33.58.57.8 Exports of goods, USD billion72.039.249.6 Imports of goods, USD billion38.530.741.7 Current Account, USD billion7.07.0-6.8-4.7 Refinancing rate, %10.57.5 Exchange rate, annual average, KZT/USD120.6150.0 Kazakhstan: summary of the current economic indicatorsV. Kazakhstan: summary of the current economic indicators Basic scenario

15. VI. III VI. III ASTANA ECONOMIC FORUM Theme: «Crisis Lessons and Post-Crisis Model of Economic Development in Globalization Conditions». The work of the Forum will be focused on the following themes:  Anti-crisis governmental regulations of economy and the new models of post crisis development.  Formation and development of innovative economy.  Formation of new world financial architecture.  Increasing competitiveness of countries.  Development of public private partnerships under globalization. The Award for the Best Research in the Field of Economics will be organized. Internet-forum will be held at the web-site www.economyclub.info with the aim to unite the efforts of scientists-economists from all over the world for working-out of a post - crisis model of economic development in conditions of globalization during the period of July 1, 2009 - May 1, 2010.www.economyclub.info The leading scientific research institutes, centers, international organizations, and scientists, politicians and representatives of the business community are invited to take part in the work of the III Astana Economic Forum July 5-7, 2010

16. Thank you for attention!