Kazakhstan's GDP decreases as of 2020 less than global decline - National Bank

Central Asia Materials 27 January 2021 05:01 (UTC +04:00)

BAKU, Azerbaijan, Jan. 27


The decline in GDP reached 2.6 percent in Kazakhstan as of 2020, which is less than the global decline (4.4 percent) thanks to the unprecedented anti-crisis measures, Chairman of the National Bank of Kazakhstan Erbolat Dossaev said, Trend reports with reference to the National Bank.

After a record drop in the second quarter of 2020, business activity is recovering to the pre-crisis level. In accordance with the forecast of the National Bank, the economy of Kazakhstan will enter a positive trajectory from the second quarter of 2021. As of 2021, taking into account an oil price of $45 per barrel, growth is expected at the level of 3.7-4.0 percent.

The National Bank sets a task to return inflation rate from the current level of 7.5 percent to the target band of 4-6 percent in 2021. In the medium term, this will help achieve the inflation target of 3-4 percent, announced at the 20th Congress of the Nur Otan Party.

For this purpose, the National Bank has developed a Monetary Policy Strategy until 2030, which envisages the systemic measures to improve the efficiency of monetary and macroeconomic policies of the country.

Kazakhstan’s foreign exchange market experienced a big shock in 2020. The global pandemic and shock in the commodity markets led to the depreciation of the tenge rate in March 2020 by 17 percent up to 448.5 tenge ($1.06).

The National Bank, together with the government, adopted a set of measures to ensure stability in the domestic foreign exchange market.

Thanks to the abovementioned measures, the tenge exchange rate won back some losses, having strengthened by 6.1 percent by the end of 2020 (to 420.91 tenge that’s $1). As a result, over the entire year, the tenge rate depreciated by only 10 percent amid great weakening of the emerging market currencies.

The further measures will be taken in 2021to strengthen the floating rate regime and adhere to the market principles when converting the assets of the National Fund and conducting operations to smooth out market volatility.