* GDP growth to outstrip other ex-Soviet economies
* Inflation in 2012 to be slightly over 6 pct - Deputy PM (Adds background)
By Raushan Nurshayeva
ASTANA, Dec 6 (Reuters) - Kazakhstan’s economy, the largest in Central Asia, is expected to expand by at least 5 percent this year, outpacing growth in Russia and other former Soviet economies, Deputy Prime Minister Kairat Kelimbetov said.
Annual inflation would also be at the low end of a forecast range of between 6 percent and 8 percent this year, compared with 7.4 percent in 2011, Kelimbetov told reporters.
“We are planning by the end of the year for GDP growth of no less than 5 percent and inflation a little above 6 percent,” he said on Thursday.
Kazakhstan’s gross domestic product was $185 billion at the end of 2011. The country of 16.7 million people is the largest oil producer in the Soviet Union after Russia, and is also the world’s biggest uranium miner and a leading exporter of wheat.
The latest forecast for GDP growth is below the 7.5 percent growth recorded in 2011, but appears set to outpace growth of 3.5 percent forecast Russia this year.
In Ukraine, officials say GDP growth this year may be about 1 percent, although some analysts expect the economy to stagnate after shrinking 1.3 percent year-on-year in the third quarter.
Ratings agency Fitch raised its view of Kazakhstan’s credit profile on Nov. 20 in recognition of the country’s sovereign balance sheet and initial efforts to cleanse bad debts from its banking system.
The BBB+ long-term foreign currency issuer rating, with a stable outlook, pushed Kazakhstan firmly into investment grade territory and a notch above Russia.
Kazakhstan’s sovereign debt is just 11 percent of GDP, and Fitch expects a budget surplus of 3 percent of GDP next year.
The state also saved more than half of oil export inflows last year in a rainy-day fund. The National Fund had swollen to $57.5 billion by the end of November from $43.7 billion at the end of last year.
“Kazakhstan has built significant buffers to guard against external shocks,” Renaissance Capital said in a research note on Dec. 5. “Its welfare fund’s assets amount to 23.5 percent of GDP versus 6.1 percent in Russia.”
A slowdown in inflation earlier this year has prompted Kazakhstan’s central bank to cut its key refinancing rate on four separate occasions since February. It has been at a historic low of 5.5 percent since Aug. 6.
Annual inflation has since quickened, reaching 5.6 percent in November after it became apparent the drought-hit grain crop would be less than half of the record harvest in 2011. (Writing by Robin Paxton; editing by Ron Askew)