IMF Official Calls for Stronger Reforms to Achieve Kazakhstan’s 6% Economic Growth Target
Head of the International Monetary Fund (IMF) mission in Kazakhstan, Nicolas Blancher, recently shared insights with The Astana Times regarding the necessary structural reforms and efforts to combat inflation in the country. According to Blancher, Kazakhstan’s target of achieving 6% economic growth is attainable, but it will require bold and decisive reforms to be implemented.
The IMF recently concluded Article IV consultations with Kazakhstan, highlighting that economic activity remained robust in 2024 with a gradual decrease in inflation. GDP growth is projected at 3.9% for the year, reflecting a slight decline from the previous year due to increased public spending. Inflation has eased to 8.4% in August and is expected to further decrease to 8.3% by the end of the year. There is also a forecasted current account deficit of 1.3% of GDP for 2024.
One of the key recommendations from the IMF for Kazakhstan is to accelerate the implementation of structural reforms. While progress has been made in stabilizing the economy, the country faces growing challenges that necessitate more dynamic, private sector-led reforms. Blancher emphasized the importance of creating conditions for the private sector to thrive, as it has the resources and efficiency to drive growth and productivity.
The IMF is advocating for a more competitive and transparent business environment, urging the reduction of the state’s presence in the economy, elimination of corruption, and promotion of transparency and competition to foster growth. Blancher highlighted that bolder reforms are essential to achieving the 6% growth target set by President Kassym-Jomart Tokayev.
In addressing inflation, Kazakhstan has made progress in reducing it from nearly 20% in 2023 to 8.3% as of September. Blancher commended the country’s monetary policy stance and emphasized the need to continue with tight monetary policies to reach the inflation target of 5%. He also stressed the importance of fiscal discipline, including implementing tax reforms, to stabilize the economy in the long term.
The IMF expressed concerns about rising transfers from the National Fund to cover government spending, cautioning that current spending patterns could become unsustainable. Kazakhstan’s fiscal position remains stable, supported by the National Fund, but adjustments are needed to ensure financial sustainability.
In conclusion, Blancher underscored the importance of implementing bold reforms and maintaining fiscal discipline to drive economic growth, create jobs, and attract investments. Kazakhstan’s commitment to structural reforms and inflation control will be crucial in achieving sustainable and inclusive growth in the long term.
