High metal prices and ongoing fiscal stimulus support strong recovery
GDP growth is forecast to accelerate to 6% this year from about 5% in 2012. Activity will be supported by a small improvement in key export markets in China and the Eurozone, and by more favorable movements in metal prices. In addition, continued fiscal stimulus will also support domestic demand.
The current account surplus is forecast to fall further this year to less than 2% of GDP from 4.4% in 2012. Goods exports are forecast to rise by just 3.5% due to a 4.8% decline in the oil price. Import growth will remain more resilient at 13%. A small current account surplus is expected over the forecast period, underpinned by higher oil output.
Inflation is expected to edge up further this year on looser fiscal and monetary policy and gently rising global food prices.
Growth is expected to accelerate further to 7.5% in 2014 and to an average of 7% in 2014-16. This pickup will reflect a further strengthening in the global economy as well as output from the large Kashagan oil field. More modest rises in government spending and a more tightly regulated banking sector will keep growth below levels seen in 2000-07.
Real GDP growth
Source: Oxford Economics
Inflation
Source: Oxford Economics
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