BAKU, Azerbaijan, February 14. Kazakhstan adopted several measures that will ensure the predictability of the GDP dynamic and shock absorption, Eurasian Development Bank (EDB) told Trend.
The source at the EDB added that the steps taken to strengthen the macroeconomic environment contributed to Kazakhstan’s ability to mitigate negative external impacts on the economy in recent years.
“The transition from a fixed exchange rate regime to an inflation targeting policy and free exchange rate formation enabled the country to limit the impact of negative external shocks,” the bank representative added.
According to the Almaty-based bank, the effectiveness of the inflation targeting was demonstrated during the COVID-19 pandemic induced 2020 economic turbulence.
“Despite a significant decline in oil prices, inflation and the cost of domestic credit in 2020-2021 remained more resilient compared to the shock of 2014-2016 [caused by oil prices decline, followed by steep depreciation of Kazakh tenge],” the bank noted.
The source at the bank concluded by saying that the introduction of a counter-cyclical fiscal rule in 2023 in the country will help to increase the resilience of the Kazakhstan economy to the impact of external shocks and ensure greater predictability of GDP dynamics.
The Eurasian Development Bank is an international financial institution established to promote economic growth in its member states, extend trade and economic ties among them, and support integration in Eurasia through investment.