BAKU, Azerbaijan, Apr. 1
By Nargiz Sadikhova – Trend:
Kazakhstan will be able to minimize the negative consequences for the economy and keep a significant number of jobs, provided that the state of emergency is lifted soon, analyst of Kazakhstan’s Association of Financiers Merey Isabekov told Trend.
Isabekov said that no doubt coronavirus control measures, as well as current oil prices, are the circumstances that will negatively affect Kazakhstan’s economy in the short and medium term.
“Most likely, a slowdown in economic growth and a decline in income cannot be avoided. However, the amplitude of the consequences for the economy will largely depend on how soon the coronavirus crisis can be put behind,” he said.
At the same time, he said, the situation with oil prices is slightly different and does not depend on actions taken within the country.
“Irreversible negative consequences for Kazakh economy created by low oil prices will not arise all at once, since cutting of oil production is a rather costly and time-consuming. In addition, the main reason for the decline in oil prices was a decrease in demand due to measures introduced worldwide to curb the spread of the coronavirus. As the epidemiological situation improves, oil demand is expected to recover, and as a result, oil prices will increase,” Isabekov said.
He quoted Oxford Economics analysts who predict that the cost of a barrel of Brent oil this year will be $33.8 on average, and next year it will rise to $45.5. Meanwhile, he said, Goldman Sachs analysts expect Brent prices to rise to $30 per barrel in the third quarter, to $40 by the end of the year, and to $60 per barrel by the end of 2021.
“In the case that these forecasts become a reality, long-term negative consequences for Kazakhstan’s economy will be minimal, taking into account country’s reserves worth $90 billion (foreign exchange reserves and Kazakhstan’s National Fund),” he noted.
Concluding, Isabekov once again emphasized that irreversible negative consequences for Kazakhstan’s economy are possible with the condition of a protracted state of emergency in the country, which could lead to a significant reduction in jobs.
“At the same time, the measures taken by the government to combat the spread of SARS-CoV-2 and its impact on the economy is timely and well-proportioned. In particular, the government introduced a state of emergency throughout the country, 4.4 trillion tenge ($10 billion) were allocated to support country’s economy, and measures have been taken to stabilize domestic foreign exchange market,” he said.
On March 15, 2020, Kazakhstan’s President Kassym Jomart Tokayev signed a decree introducing an emergency state in Kazakhstan due to the coronavirus outbreak, which came in force from 08:00 (GMT +6) on March 16 and will last till 08:00 on April 15, 2020.
The latest data said that the total number of coronavirus cases in Kazakhstan is 336 people.
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.
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