Economic Challenges and Resilience of Kazakhstan: An Overview of the Speech by the Chairman of the National Bank, DKnews.kz reports.
On November 27, 2024, in Astana, at the plenary session of the Mazhilis of the Parliament of the Republic of Kazakhstan, the Chairman of the National Bank, Timur Suleimenov, presented a report on amendments to the Law "On the Republican Budget for 2024-2026." His speech became a key event, outlining the main directions of economic policy and responses to the internal and external challenges facing the country.
Global Economic Instability: Context and Consequences
The modern global economy is characterized by high volatility due to geopolitical instability, capital redistribution, and changes in global trade. Timur Suleimenov noted that military conflicts in several regions continue to put pressure on global economic dynamics, creating additional risks for energy-exporting countries.
For Kazakhstan, whose economy is significantly dependent on oil exports, the decline in oil prices poses a serious challenge. However, timely measures have mitigated the negative impact. The country's economy demonstrates resilience: in the first nine months of 2024, GDP grew by 4%. This indicator was achieved thanks to the balanced development of all key sectors of the economy, reflecting stable macroeconomic policies.
Inflation: Challenges and Control
One of the main topics of the speech was inflation. This macroeconomic indicator significantly affects the purchasing power of the population, business competitiveness, and the stability of the financial system.
In 2024, there was a noticeable decline in inflation from the record levels of February 2023, reflecting the effectiveness of anti-inflationary measures. However, in October of this year, inflation began to rise again, reaching 8.5%. The most significant pressure came from inflation in the paid services sector (14.3%), explained by the implementation of the "Tariff in Exchange for Investment" program and rising costs for certain market services.
Inflation for non-food products accelerated to 7.8%, driven by increased production costs and rising import prices. At the same time, a positive factor was the slowdown in food price growth to 4.9%, which had a restraining effect on the overall inflation rate.
Forecasts and Objectives for 2024
By the end of 2024, inflation is expected to range between 8% and 9%. This aligns with the National Bank's forecasts, which adhere to a moderately tight monetary policy to achieve the set targets. However, there are significant risks associated with external factors, such as fluctuations in oil prices, and internal factors, including the revision of transfer volumes from the National Fund.
The Role of the National Fund: Budget Balance and Economic Stability
Special attention in the report was given to the role of the National Fund. In 2024, the volume of direct transfers from the fund will amount to 5.6 trillion tenge, and the total withdrawals will exceed 6 trillion tenge. Such a level of budget dependence on oil revenues creates inflationary pressure, limiting the potential for easing monetary policy.
Timur Suleimenov emphasized that the high volume of transfers from the fund prevents the reduction of the National Bank's base rate, which could make loans more accessible to businesses and stimulate economic growth. To address this issue, he proposed utilizing the new Tax Code as a tool to increase non-oil revenues of the republican budget and achieve financial sustainability.
Anti-Inflationary Strategy: Priorities and Cooperation
Combating inflation remains a central priority of Kazakhstan's economic policy. High and unstable inflation negatively affects the population's standard of living, undermines savings and investment activity. For businesses, it complicates long-term planning, reduces investment motivation, and ultimately slows economic growth.
The National Bank plans to work closely with the government to coordinate policies and stabilize inflation. Key measures include maintaining a balanced monetary policy, ensuring transparency in decision-making, and adopting a systematic approach to macroeconomic challenges.
Long-Term Prospects: Challenges and Opportunities
Kazakhstan has achieved significant success in stabilizing the economy, but the country faces long-term challenges requiring structural reforms. Reducing dependence on oil revenues, diversifying the economy, increasing the efficiency of public spending, and improving conditions for businesses are critical to strengthening resilience.
According to Timur Suleimenov, developing a new Tax Code, strengthening budgetary discipline, and boosting the non-oil sector will be important steps toward balanced development.
The report by the Chairman of the National Bank of Kazakhstan was an important signal of the country's readiness to face external and internal challenges while maintaining positive economic growth dynamics. The strategy for combating inflation, strengthening the role of the National Fund, and introducing new tax instruments lay the foundation for sustainable development. However, success will depend on the state's ability to respond promptly to changing conditions and implement necessary reforms.
