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Kazakh government realistic on oil and COVID-19 shocks

Thursday, April 9, 2020

Significance

In response to the new macroeconomic realities, the government put on hold the fiscal consolidation plans it announced earlier and allocated 4.4 trillion tenge (10.1 billion dollars) to fight the spread of COVID-19 and its economic fallout.

Impacts

  • The COVID-19 crisis is a test for the new president; he has previously been somewhat overshadowed by his predecessor Nursultan Nazarbayev.
  • The deteriorating credit quality of corporate and individual borrowers will raise levels of non-performing loans in the banks.
  • A weak tenge will improve exporters' profit margins but could deter future foreign investment.

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