ALMATY (Interfax-Kazakhstan) – The Kazakh economy is estimated to grow at 1.3% in 2015, the World Bank (WB) says in a May report.

“Kazakhstan’s GDP growth is likely to reach a low point in 2015, but gradually recover thereafter. It is estimated to grow at 1.3% in 2015, and then rise to 2.8 and 3.9% in 2016 and 2017, respectively”, the report says.

This is compared to the previous projections of the World Bank at 1.8% in 2015, 3.2% in 2016 and 4.7% in 2017, according to its report issued in January 2015, and at 5.9% in 2015 and 6% in 2016, according to a report released in June 2014.

“The outlook is subject to downside risks. Oil price changes and economic developments in China and Russia – two very important trade partners, and sources of FDI inflows – will directly affect Kazakhstan”, the May report says.

“Fiscal policy is expected to normalize in 2016-17, and total government debt is expected to remain sustainable, as there are ample reserves in the Oil Fund to cover it. Monetary policy may need to adjust in response to external pressures”, the WB says.

According to ADB this slowdown reflects slumping oil prices, economic weakness in the Russian Federation, and tenge appreciation against the ruble, which has hurt the competitiveness of Kazakh exports and boosted imports from the Russian Federation. On the supply side, mining is forecast to contract by 10.0% in 2015 and remain unchanged in 2016, dragging down industry by 5.3% in the first year and allowing marginal growth of 0.4% in the second. The slowdown will limit growth in services to 5.0% in both years.

However, investments in housing and infrastructure under a state program for regional development are projected to boost construction by 4.0% annually, and past investment under the Agriculture 2020 development program is projected to expand agriculture by 2.7% in 2015 and 4.0% in 2016.