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COVID-quarantine in Kazakhstan allows for operation of key economy sectors

Business Materials 18 June 2020 18:17 (UTC +04:00)
COVID-quarantine in Kazakhstan allows for operation of key economy sectors

BAKU, Azerbaijan, Jun. 18

By Nargiz Sadikhova - Trend:

COVID-related quarantine measures in Kazakhstan allowed for operation of key economy sectors, which worked in favor of Kazakhstan’s economy, Sofya Donets, Russia and CIS Economist at Renaissance Capital told Trend.

Talking Kazakhstan’s government measures to support economy she noted that a continued focus on supporting growth in Kazakhstan over the past few years has been obvious.

“These measures work, including in terms of boosting investment. The fact that quarantine measures taken in Kazakhstan, despite the rigidity, preserved the possibility of functioning of key sectors, for example, industry worked in favor of Kazakh economy,” she said.

In turn, she said support measures also worked well for those sectors, the closure of which was inevitable.

“Social support measures are already affecting the economic situation, although the full effect of the anti-crisis measures will be seen only following the end of the year,” she said.

Donets further went on to say that from the point of view of financial markets, the situation at the global oil market remains a sensitive factor for Kazakhstan. This is the also the most sensitive factor affecting Kazakhstan’s national currency (tenge) rate.

“Now we see that the tenge rate has adjusted to the level corresponding to the fair value for oil at about $40 per barrel. Our base case scenario expects this price level to persist until the end of the year, and thus the tenge rate will be around current 405 per dollar,” she said.

She however said that in the case that oil prices decline the pressure on the tenge will be invetable.

“At the same time, overall, we are seeing a slight decrease in the economy sensitivity to the oil prices in terms of economic activity, which also is due to the diversification of growth sources in Kazakhstan,” Donets said.

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