Baku, Azerbaijan, Jan. 17
By Nigar Guliyeva – Trend:
Kazakhstan needs to step on the reform path that the government has set out to ensure the sustainability of the achieved results, the World Bank Astana office told Trend.
"Kazakhstan has made a good use of its oil resources by investing in the productive sectors of the economy, investing in human capital by supporting the health and education sectors throughout the country, and by investing in critical infrastructure," the Bank said, stressing that now the goal is to achieve the maintain the achieved results.
The recent Systematic Country Diagnostics , which would guide the Country Partnership Framework (CPF) for Kazakhstan for 2018-2022, identified four complementary paths that are critical elements of a reform strategy.
These are ensuring macroeconomic management focused on developing a competitive and diversified non-oil economy, and on core public services; turning the engine of economic growth towards the private sector, and away from the state sector; developing a competitive and adaptive human capital, and better integrating the country, among its own economic regions and with its neighbors, especially China, Russia, and South Asia.
The bank stressed that Kazakhstan needs to complete all four transitions.
"The economic transition to a market economy needs to be completed with a stronger and more open banking sector, and a smaller state. The social transition will be completed if Kazakhstan makes a transition to becoming a middle-class country. A demographic transition will also hit Kazakhstan, as over the next decade, a mini-baby boom will hit the labor market (with possible social sustainability risks), and in the longer the aging population will increase the dependency ratio (and bring fiscal implications)," the bank said.
Kazakhstan’s transition to become a more energy efficient economy remains to be completed, according to the bank.
In 2017, the oil sector was the main driver of economic growth, as oil output increased by 12.5 percent year on year, in the first nine months of 2017 due to the commissioning of the long-awaited off-shore oil field Kashagan in October 2016.
Lower inflationary pressures allowed the central bank to cut its policy rate further from 12 percent at the beginning of 2017 to 10.25 percent in August 2017. The inflation rate fell from over 17 percent year on year in the summer of 2016 to below 8 percent throughout 2017, as a pass-through effect from the currency devaluation faded out.
Since 1992, the Bank has provided 46 loans to the country for a total amount of more than $8 billion. Current WB’s active portfolio in Kazakhstan comprises 13 investment projects, including 3 TF-funded projects, with a total net commitment of $3.8 billion.