Kazakhstan Braces for Oil Price Drop with Three Scenarios Amid US Tariff Halt
The Kazakh government is preparing for potential budget cuts as oil prices approach a pessimistic scenario of $60 per barrel, reported Zakon.kz. Deputy Prime Minister and Minister of National Economy Serik Zhumangarin outlined three scenarios – optimistic, baseline, and pessimistic – in case of further declines in oil prices during an April 9 briefing in the Mazhilis, the lower house of Parliament.
Kazakhstan’s budget heavily relies on oil revenues, and with Brent crude prices near the $60 per barrel mark, Zhumangarin highlighted the need for potential budget adjustments. However, a temporary 90-day suspension of new United States tariffs, excluding China, has led to a slight recovery in oil prices.
Regarding U.S. tariffs on certain Kazakh goods, Zhumangarin stated that they are expected to have minimal impact on the country’s economy. The new duties apply to only 4.8% of Kazakhstan’s exports to the U.S., valued at nearly $100 million.
Zhumangarin emphasized the ongoing consultations with the U.S. and the establishment of a working group to address the situation. Kazakhstan is also utilizing various channels, including the Kazakh Embassy in the U.S. and World Trade Organization instruments, to protect national interests.
The government is proactively assessing budget responses for potential further declines in oil prices, including scenarios of $55 or $50 per barrel. Zhumangarin stressed the importance of preparedness even if oil prices remain stable.
Despite the challenges, Kazakhstan has a history of successfully navigating crises and should focus on infrastructure development and job creation. Zhumangarin highlighted the essential role of the National Fund during crises, as it is designed to address such situations.
