Boston, MA -- (SBWIRE) -- 01/07/2014 -- Kazakhstan's construction industry will experience solid growth over our forecast period on the pack of continued investment into the hydrocarbons sector, transport links and industrial projects. We estimate that 5.4% growth was posted in 2013 and as progress is made on a number of large scale projects, 9.2% is forecast for 2014. Long-term political stability remains the major risk to confidence, although there are signals that a presidential successor is being lined up, which will lower the risk outlook. The construction sector will remain exposed to global oil and commodity price fluctuations.

Recent Developments

- DP World will develop a new free economic zone in Kazakhstan. DP World will develop the Khorgos-Eastern Gates zone and Aktau port in order to establish the largest logistics centre in Eurasia. It willinvest at least AED3.67bn (US$1bn) in the project.
- The much touted high-speed line between Astana and Almaty, has been postponed due to a lack of financing. The government has stated that a lack of commercial viability has made financing the project a challenge, confirming our view that the demand dynamics for such a project were likely to be a major hurdle to overcome.
- The 2017 EXPO in Astana is set to boost the construction industry. Construction of the site, which the government is funding to the tune of US$325mn, is expected to in March 2014.
- Astana is the focus of residential and non-residential construction activity in the country. Most recently, a US$1.4bn contract was been awarded to a joint venture company led by Arabtec. The project will be named Abu Dhabi Plaza, comprising a mixed-use development of 500.000 square metres. The project is expected to be completed in 2017.

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Kazakhstan's real GDP growth was 5.7% year-on-year (y-o-y) in the first three quarters of 2013. However, we hold to our forecast of 5.4% growth in 2013, followed by 5.5% in 2014. A halt to production at the Kashagan oil field in October due to technical problems will hit exports in Q413, with production not expected to start up until Q114 at the earliest.

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