IMF Calls for Bold Reforms After Article IV Consultations
The International Monetary Fund (IMF) recently hosted a press conference in Astana, presenting the preliminary findings of the Article IV consultations with Kazakhstan. The IMF acknowledged the resilience of the Kazakh economy but called on the government to implement bolder reforms and enhance fiscal performance.
The IMF team, led by Nicolas Blancher, head of IMF Mission in Kazakhstan, concluded a two-week mission in the country. Blancher highlighted the robust economy and declining inflation, projecting a growth rate of 3.9% for 2024. Looking ahead, the IMF expects the economy to accelerate in 2025, mainly due to higher plans for oil output.
However, the IMF raised concerns regarding Kazakhstan’s fiscal policies, emphasizing the need for improved budget planning and realistic revenue projections. The IMF expressed support for the new Tax Code being discussed, which aims to increase non-oil public revenues.
Another issue of concern is Kazakhstan’s heavy reliance on the National Fund to finance budget deficits. The IMF urged Kazakhstan to strengthen the transparency and rules-based nature of its fiscal framework to align with international best practices.
On a positive note, the IMF commended Kazakhstan’s efforts to strengthen the financial sector, noting improvements in financial supervision and the development of a framework for resolving distressed banks. However, the IMF emphasized the need for more decisive structural reforms to achieve the country’s growth targets.
In terms of climate resilience, the IMF advocated for increasing Kazakhstan’s carbon price to incentivize investment in renewable energy sectors. The IMF also emphasized the importance of social responsibility in protecting vulnerable communities affected by the transition away from fossil fuels.
The final assessment and staff report from the IMF’s consultations will be reviewed by the executive board by late November. It is clear that Kazakhstan is facing significant economic challenges, but with bold reforms and strategic planning, the country can position itself for sustainable growth and development in the future.
