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Kazakhstan’s measures to soften COVID-blow to somewhat make up for GDP slump

Business Materials 24 July 2020 13:01
Kazakhstan’s measures to soften COVID-blow to somewhat make up for GDP slump

BAKU, Azerbaijan, Jul. 24

By Nargiz Sadikhova - Trend:

Measures taken by Kazakhstan’s government to soften the COVID-related consequences will make up for 2-3.5 percentage drop in GDP growth, Analyst of Eurasian Development Bank’s Economic Analysis Department Aigul Berdigulova told Trend.

In her words, in order to mitigate the negative consequences of the restrictive measures introduced in March and April 2020, Kazakhstan’s government introduced an anti-crisis package of measures worth 5.9 trillion tenge, which accounts for about 8.7 percent of GDP ($14.3 million).

“This support covers a wide range of instruments: tax breaks, targeted social assistance, payment of monthly cash compensation in the amount of one minimum wage to persons who have lost their income due to the introduction of emergency state, and preferential lending. At the same time, many measures were taken with a margin of time. For example, tax benefits are valid until October 1 of this year, and a one-time payment in the amount of one minimum wage is automatically activated when the quarantine regime is reinforced,” she said.

Berdigulova noted that due to the fact that the restrictive measures reintroduced in July 2020 are not as tough as those introduced in April and allow for the partial functioning of the economy, they will have less impact on the economic indicators of Kazakhstan.

She noted that the COVID-19 pandemic consequences have already led to a significant decrease in economic activity in Kazakhstan.

“Outgoing economic data indicates a significant weakening of consumer and investment demand. Our estimates say that by the end of 2020 a 2-3 percent reduction in Kazakhstan’s GDP is to be expected,” she said.

She also said that the epidemiological situation stabilization in the world, resumption of global economy and commodity markets growth, as well as expected implementation of internal structural transformations will become key factors in economic activity recovery in 2021–2022.

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