Kazakhstan economy suffers the largest shock in two decades due to COVID-19, says World Bank
World Bank called a negative impact of COVID-19 on Kazakhstan’s economy the largest in twenty years. The World Bank’s latest Kazakhstan Economic Update (Summer 2020) – Navigating the Crisis report stated that: “For the first time since the late 1990s Kazakhstan’s economy is expected to contract by projected 3 percent in 2020 with a moderate recovery by 2.5 percent in 2021.”
Although Kazakhstan’s GDP showed slight growth at 2.3 percent in the first quarter of this year, economic activities notably weakened in the following months as commodity prices dropped, trade declined, and COVID-19 preventive measures slowed economic activity.
“Consumer demand showed moderate growth at 1.2 percent, reflecting growing concerns over COVID-19 and the restriction measures. Investment is expected to ease to 1.0 percent annually, supported mostly by the on-going foreign direct investments into the oil and gas industry and residential construction,” stated in the report.
In addition, “Supply disruptions and currency depreciation pushed up inflation to above the upper bound of the National Bank target range.”
The World Bank gave a number of advices to Kazakhstan to overcome the crisis amidst the deterioration of economic figures.
The report concludes that “under the risk of a prolonged slump in the global oil market, Kazakhstan’s pathway for a resilient recovery may focus on strengthening the effectiveness of public administration and services, including the use of e-platforms to deliver key public services, better tax administration, and a mechanism to review and redeploy fiscal resources toward better state programs. A renewed emphasis on reforms in the logistics, digital telecommunications, and financial sectors could help the overall private sector explore new opportunities.”