Recovery of oil prices supporting Kazakhstan’s economic growth - Fitch

Business Materials 5 August 2021 17:55 (UTC +04:00)
Recovery of oil prices supporting Kazakhstan’s economic growth - Fitch

BAKU, Azerbaijan, August 5

By Nargiz Sadikhova - Trend:

The recovery of oil prices along with the relaxation of OPEC+ supply quotas are supporting Kazakhstan’s economic growth and external and fiscal receipts in 1H2021, Paul Gamble, a senior director in the Sovereigns here at Fitch Ratings told Trend.

In his words, COVID-19, infection cases in Kazakhstan are experiencing a new wave, but so far cases are not translating into a rise in COVID-19 related deaths, and should give the authorities some room to manage the health situation without tightening economic restrictions significantly.

“The Kazakh authorities allowed the tenge to act as the key external shock absorber, resulting in a depreciation of 11 percent in 2020 against the US dollar. The tenge’s flexibility, along with solid investment returns for the sovereign wealth fund have resulted in the resilience of external reserves,” he said.

Gamble said that fiscal policy will remain expansionary in 2021, with a new policy allowing early withdrawal of pension savings providing additional temporary stimulus to housing and construction activity.

“We forecast real GDP growth for Kazakhstan to rebound to 3.7 percent in 2021 (2020: -2.6 percent), driven by a resumption in consumption, recovering oil prices and production volumes, ongoing large hydrocarbon investments, and policy support for housing and construction activity,” Gamble added.


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