Cover IMF Staff Country Reports
Republic of Kazakhstan: Selected Issues
Author:
International Monetary Fund. Middle East and Central Asia Dept.
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Series:
IMF Staff Country Reports
Volume/Issue:
Volume 2022: Issue 368
Language:
English
Publication Date:
14 Dec 2022
DOI:
https://doi.org/10.5089/9798400226540.002
ISBN:
9798400226540
ISSN:
1934-7685
Pages:
40
Keywords:
partner diversification; trend growth; governance vulnerability; trend output growth; CIS economy; Total factor productivity; Business cycles; Budget planning and preparation; Fiscal risks; Global; Europe; Central Asia and the Caucasus
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This Selected Issues paper on the Republic of Kazakhstan focuses on revisiting trend output growth. Trend growth in Kazakhstan has decreased to 2–3 percent due to declining contributions of labor and total factor productivity (TFP). Coronavirus disease 2019 (COVID-19) may have reduced the long-term trend GDP level, but it is unlikely to have affected trend GDP growth. Structural reforms to reduce the state footprint in the economy, strengthen public and corporate governance, diversify the economy and exports away from extractive sectors, and promote technological change, are critical to increase future trend GDP growth. The monthly trend-cycle decomposition developed in this Selected Issues Paper may help expand the information set available to policymakers when taking base rate policy decisions. COVID-19 has depressed both trend level and growth in the short term through headwinds to labor, capital, and TFP. It could also affect long-term trend growth through the destruction of human capital, but it is too early to assess the statistical significance of this effect. In any case, structural reforms will be needed to increase trend growth. Priorities include reducing the state footprint, strengthening public and corporate governance, and economic and trade diversification. Increasing the share of investment, including foreign direct investment in nonextractive industries should promote R&D, innovation, and higher TFP.
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Cover IMF Staff Country Reports
IMF Staff Country Reports
ISSN:
1934-7685
Publisher:
International Monetary Fund
Volume 2022: Issue 368