BAKU, Azerbaijan, Jun. 19
By Nargiz Sadikhova - Trend:
Kazakhstan’s government acted swiftly and prioritized the economic security of the population amid COVID-19 pandemic and lower oil prices, Head of Analysis at PRISM Political Risk Management Ben Godwin told Trend.
Godwin said that the fall in oil prices has first of all impacted the 2020 national budget, which was drafted on the basis of an average oil price of $55 per barrel.
“The government has decided to maintain budget spending using additional funds from its oil fund and borrowing from international financial institutions such as the Asian Development Bank, which is supplying nearly a billion dollars to support the budget. The oil price has also heavily impacted the currency, which has fluctuated in line with oil prices, dropping by as much as 16 per cent in April, lowering the purchasing power of average citizens,” he said.
In his words, country’s oil industry has also been heavily hit by the decline in oil prices. Furthermore, thousands of workers have been laid off or furloughed, creating the potential for social unrest in Kazakhstan.
However, talking the measures taken by Kazakhstan’s government to support the economy he said that the government’s economic response has been commendable.
“It has acted swiftly and prioritized the economic security of the population by extensive measures to support individuals that have lost their jobs and small and medium enterprises, which are the primary employers in the country. Overall, the government has allocated some $13.4 billion to measures such as tideover loans to businesses and direct benefit payments,” Godwin said.
Godwin noted that while these measures may assist in the short term, they cannot continue indefinitely.
“Kazakhstan’s recovery is set to be long and difficult, and we therefore anticipate a period of falling living standards and potential social unrest,” he said.
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