UPDATE 1-Kazakhstan's Jan-April industrial growth slows

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By Tatyana Seroshtanova

ALMATY, May 13 (Reuters) - Kazakh industrial growth slowed in the first 4 months of 2008 as copper, steel and iron ore output shrank in key industrial regions and oil production registered a decline in April, official data showed on Tuesday.

Central Asia's biggest economy has shown signs of weakness since mid-2007 when global liquidity problems started to bite into its long-booming banking sector, sparking concerns that credit woes could spill over into the country's wider economy.

The state statistics agency said in a statement industrial output grew 3.5 percent year-on-year in January-April 2008 compared to 9.5 percent in the same period of last year.

Industrial production shrank 3 percent month-on-month in April compared with 10 percent growth in March, it said.

The utilities sector registered the sharpest decline as central heating went off in most parts of Kazakhstan in mid-April due to warm weather.

Oil and mining -- Kazakhstan's key industries -- added to the slowdown, with crude oil output falling 5.6 percent month-on-month in April. Natural gas output shrank 7.3 percent and copper production fell 5.3 percent.

London-listed Kazakhmys (KAZ.L) accounts for the bulk of Kazakh copper output. The country's total copper output was down 17.5 percent year-on-year in January-April, the agency said.

Industrial output in Karaganda region, home to Kazakhmys and Arcelor Mittal (MT.N) mines and smelters, declined 5.5 percent year-on-year in January-April.

A global liquidity squeeze has limited funding for many Kazakh banks and companies, and crippled the once-booming construction sector of Central Asia's top economy.

Industrial output in capital Astana and commercial hub Almaty, where most construction activities are based, was down 13.2 percent and 8.6 percent, respectively, in January-April.

Heavy foreign borrowing by Kazakh banks, partly to fund the building boom, has concerned investors, who fear that tighter liquidity could threaten the country's 10-year economic growth spurt and upset stability. (Writing by Olzhas Auyezov; editing by Stephen Nisbet)