NUR-SULTAN

The introduction of new COVID-related restrictions may slow down economic growth in Kazakhstan by 0.5 percent to 3.2 percent in 2021, central bank governor Yerbolat Dosayev said.

Eight regions of Kazakhstan remain in the “red” zone for coronavirus, while six more are in the “yellow” zone as the Central Asian country undergoes a fresh spike in the cases.

Because of the difficult economic situation, the country’s gross domestic product (GDP) contracted by 1.6 percent in the first quarter of this year after contracting 2.9 percent in January-February, Economy Minister Aset Irgaliyev told a government meeting.

He said that annual inflation slowed down to 7 percent in the first quarter.

The International Monetary Fund said last week that Kazakhstan’s GDP was projected to grow 3.2 percent in 2021 and 4.0 percent in 2022. Annual inflation is projected at 6.4 percent this year and 5.0 percent in 2022.

According to the World Bank’s latest projections, the country’s economic growth is expected to rebound in 2021, driven by the resumption of domestic activity, recovery in global demand for oil, continued fiscal support measures, and a successful national inoculation against the COVID-19 virus.

With the continued pace of recovery, the economy is expected to grow within 3.0-4.0 percent range in 2021 and 3.5 percent in 2022.

The central bank governor Dosayev said that the state-owned National Fund’s assets declined by $523 million in a month to $57.1 billion as of April 1 due to exceeded spending over revenues.

He said that revenues to the fund stood at 65 billion tenge ($150 million). At the same time, the fund sold $695 million in March in order to make transfers in amount of $765 million.

The oil-exporting Central Asian nation plans to rely heavily on its $65 billion fund in the coming years to fill the budget gaps.

Dosayev said the central bank’s total reserves fell by $1.13 billion in March to $33.54 billion as of April 1, mainly due to 4.5 percent decline in gold price on the world market $1,685 from $1,765 per ounce. Price have started to rise since April 1 and the central bank’s gold portfolio increased by $756 million, the governor added.

He said that the central bank’s currency reserves stood at $90.64 billion as of April 1 after repayment of the state debt in amount of $72 million.