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Continued structural reforms needed for sustained economic dev't in Kazakhstan

Business Materials 13 July 2020 15:44
Continued structural reforms needed for sustained economic dev't in Kazakhstan

BAKU, Azerbaijan, Jul. 13

By Nargiz Sadikhova - Trend:

Sustained economic development will require continued structural reforms in Kazakhstan, Nicolas Blancher, IMF Mission Chief for Kazakhstan told Trend.

Blancher said that Kazakhstan’s economy has been severely hit by two shocks: the coronavirus pandemic and the oil price fall.

“In response, the authorities initiated a large anti-crisis policy package in late March, including increased social spending, especially in the health sector, as well as cash transfers to the unemployed and self-employed, and support to businesses through subsidized loans, tax breaks and deferrals, and bank loan rescheduling,” he said.

In his words, these targeted measures have provided critical relief to businesses and households.

“In implementing them, Kazakhstan benefited from significant fiscal buffers, and the authorities appropriately relied on exchange rate flexibility to help absorb external shocks,” Blancher noted.

The mission chief emphasized that going forward, it will be important to monitor the implementation of these measures and make adjustments as needed when the country moves into a recovery phase.

“More broadly, sustained economic development will require continued structural reforms, including to reduce the state footprint and support private sector development, in order to promote economic diversification and adapt to a low-oil-price environment,” Blancher concluded.

On the morning of March 9, 2020, Brent crude plunged 25 percent dropping to its lowest since February 2016 and recording the biggest one-day percentage declines since Jan. 17, 1991.

Trading volumes in the front-month hit record highs in the previous session after a three-year pact between Saudi Arabia and Russia and other major oil producers to limit supply fell apart on March 6, 2020.

The first two cases of coronavirus infection were detected in Kazakhstan among those who arrived in Almaty city from Germany on March 13, 2020.

The total number of coronavirus cases confirmed in Kazakhstan since the virus was first confirmed in the country amounted to 59,899 cases. This includes 34,190 people who recovered from the coronavirus, and 375 patients who passed away.

On Jun. 2, 2020, an announcement was made that Kazakhstan is reintroducing quarantine regime as the COVID-19 cases count is increasing countrywide.

By a decision of an intergovernmental commission, the quarantine is being imposed for a period of 14 days starting Jul. 5, 2020.

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