In Kazakhstan we have the following priorities:
Balancing the roles of the public and private sectors. The Bank will continue to support the growth of private enterprises, which are still outweighed by the public sector. By investing in the private sector, including small and medium-sized enterprises (SMEs), in agribusiness and the non-extractive sectors, the EBRD hopes to improve the economy’s competitiveness. The Bank remains interested in the privatisation programme announced by the government. At the same time, the Bank will continue to support the reform of Kazakhstan’s public sector and the commercialisation of state-owned enterprises.
Broadening access to finance, strengthening the banking sector and developing local capital markets. Many firms continue to suffer from insufficient access to finance. The EBRD will work on improving the resilience of Kazakhstan’s financial sector, which will in turn help relieve pressures on businesses, especially SMEs and the non-extractive sector.
Inter-regional connectivity and international integration. Investing in Kazakhstan’s infrastructure remains an important focus of the EBRD. By supporting inter-regional and cross-border rail and road projects, the Bank seeks to enhance connectivity and boost the economic inclusion of remote regions of the country.
Green economy transition. The EBRD is the largest investor in sustainable energy in Kazakhstan, covering both renewable energy and energy-efficient technologies. It will continue to combine investment with policy engagement, in order to further help the country develop a supportive regulatory framework for sustainable energy, water and resource use. Decreasing Kazakhstan’s carbon footprint is crucial for the country’s sustainable development across all sectors, notably in agriculture, energy and industry.
As well as being a country where the EBRD works, Kazakhstan is also an EBRD donor. To date, Kazakh government contributed EUR 63 million supporting Women in Business Programme, Business Advisory Services and policy dialogue objectives in Kazakhstan with a primary focus on transport, telecommunications and energy efficiency.
Kazakhstan's policy response to the coronavirus crisis
The EBRD is monitoring Kazakhstan's policy response to the coronavirus pandemic. Our biweekly publication identifies the major channels of disruption as well as selected impact and response indicators.
EBRD forecast for Kazakhstan’s Real GDP Growth in 2020 -3.0%
EBRD forecast for Kazakhstan’s Real GDP Growth in 2021 5.5%
Real GDP growth in Kazakhstan accelerated from 4.1 to 4.5 per cent in 2019 on the back of rising private consumption and fixed investment. With the state of emergency declared only on March 16, the economy continued expanding in the first three months of 2020, adding 2.7 per cent year-on-year. Retail trade, transport and hospitality industries were the first sectors to be affected by the lockdown, seeing negative growth already in the first quarter. Social distancing measures, partially eased since late-April, will remain in place at least until mid-May 2020, wreaking havoc on the service industry and the SME sector in particular. In parallel, the economy is strongly affected by lower commodity prices, and the planned cuts in oil production, in line with Kazakhstan’s OPEC+ commitments. As a result, the tenge came under strong pressureand lost 11 per cent of its value in the first four months of the year. On the positive side, Kazakhstan has sufficient fiscal space and international reserves to support businesses and domestic demand. The banking sector is liquid, and lending to the economy is mainly constrained by a perception of elevated risks.
The government reacted to the crisis with a US$ 13 billion (9 per cent of GDP) stimulus package providing support to the affected businesses and households. To address short-term liquidity needs in the SME sector, the government and the central bank are offering loans at concessional terms as well as tax, utility and loan repayment deferrals. The change in relative prices could also create the conditions for diversifying the economy away from excessive dependence on the gas and oil sector. Overall, we expect the domestic demand to reach its pre-crisis level only by mid-2021, leaving the economy on a lower growth trajectory. According to our forecast, the economy will contract by 3.0 per cent in 2020, followed by a 5.5 per cent rebound in 2021, supported by a partial recovery of oil prices.