The International Monetary Fund (IMF) has commended Kazakhstan for its economic resilience in the face of external shocks and its strong growth in 2023. However, the IMF has also called for continued structural reforms to maintain strong and resilient growth in the country.
This was the conclusion reached by the IMF executive board as they concluded the 2023 Article IV consultation with Kazakhstan. The IMF press service reported on Feb. 7 that the mission noted Kazakhstan’s economic resilience and welcomed the strong growth in 2023, while emphasizing the need for continued structural reforms.
The IMF directors encouraged the authorities to accelerate structural reforms to boost competitiveness, promote diversification, and sustain more robust long-term economic growth. Key priorities include downsizing the state footprint in the economy, improving public sector governance, reducing corruption-related vulnerabilities, addressing infrastructure gaps, and removing trade distortions.
The IMF also welcomed the declining trend of inflation in Kazakhstan and urged the National Bank to maintain a cautious and data-dependent approach by keeping monetary policy tight until inflation is close to the target and inflation expectations are well anchored.
Furthermore, the IMF emphasized the importance of accelerating reforms to strengthen climate resilience and meet the authorities’ carbon emission targets by 2030. They also called for close monitoring of climate-related risks in the financial sector.
In terms of economic projections, Kazakhstan’s economic growth is expected to slow to 3.1%, primarily due to delays in expanding the Tengiz oil field. However, inflation, which is still well above the authorities’ target, is expected to continue to decline. A current account deficit of 3.9% of gross domestic product (GDP) is projected for 2024, and the banking sector should remain sound amid easing financial conditions. In the medium term, non-oil GDP growth is expected to stabilize at around 3.5%, and inflation is projected to ease gradually to reach 5% by 2026–2027, assuming accelerated reform implementation.
The IMF’s recommendations and projections reflect its belief in Kazakhstan’s potential for sustained economic growth, provided that the country continues to implement necessary reforms to maintain economic resilience and combat inflation.