The World Bank’s Kazakhstan Economic Update published on January 29 anticipates that the Central Asian nation's economy will grow by 2.5% in 2021 and by 3.5% in 2022. It also sees significant downside risks due to the uneven worldwide economic recovery and higher debt-related risks on the global financial market. 

World Bank experts regard 2020 as the most challenging year for the ex-Soviet state’s economy in two decades. The coronavirus pandemic has hit the Kazakh economy harder than the crises of 2008 and 2015, halting global activity and weakening global demand and the price of oil, Kazakhstan’s main export commodity. Kazakhstan’s economy shrank by 2.6% in 2020.

“The economy is expected to grow modestly in 2021 based on an improved global economic outlook, higher demand for exports, resumption of domestic economic activities, and higher disposable income,” Sjamsu Rahardja, senior economist at the World Bank Country Office in Kazakhstan said during a panel discussion of the bank’s findings. “The risks to the economy are on the downside. However, smooth implementation of COVID-19 vaccinations and continuation of the economic reforms are important for sustaining growth.”

The pandemic has severely harmed the retail, hospitality, wholesale, and transport sectors, and 30% of employment in cities, though the rural population is set to experience the strongest shock. 

Kazakhstan’s poverty rate will jump by 12-14 percentage points in 2020 from a baseline of 6% in 2016, the World Bank forecast.

“The most significant increase in the number of the poor is expected to come from rural areas, which threatens to increase inequality in Kazakhstan,” said Jean-Francois Marteau, World Bank country manager for Kazakhstan. “The country’s average GDP growth has declined after each economic crisis, weighed down by the lackluster productivity growth and over-dependency on hydrocarbons. Therefore, more than ever, Kazakhstan needs to focus on delivering reforms for inclusive economic recovery and higher productivity, as well as ensuring the effectiveness of government programs.”