NUR-SULTAN – The Asian Development Bank (ADB) has recently approved a $1 billion assistance package to Kazakhstan to help Central Asia’s largest economy address the COVID-19 pandemic consequences.
The package will “help to mitigate the spread of the disease and support government measures to contain the negative impact of the pandemic.”
The ADB’s financial assistance will also support the nation’s efforts with the health policy response, social protection and employment, as well as the government’s economic strategy meant to revive the post-pandemic economy.
The bank noted the adverse impact the pandemic incurred on small and medium sized businesses particularly in the services sector, where women account for more than 65 percent of the workforce.
In its press statement, it commended the nation’s efforts in supporting its population, including assistance to vulnerable groups of the population.
“The government’s package of economic measures includes liquidity support for local companies through guaranteed loans, deferral of tax payments and other fiscal incentives for small and medium sized businesses—at least 42 percent of which are owned or managed by women—and workers in sectors most affected by the lockdown, such as tourism,” said the bank.
The assistance is part of the ADB’s $20 billion package designed to help its developing partner countries mitigate the macroeconomic and health consequences stemming from the pandemic.
In its June supplement to its annual flagship economic publication, the Asian Development Outlook (ADO) 2020, the bank adjusted Kazakhstan’s economic growth forecast for 2020 from April’s 1.8 percent to 1.2 percent.
“The service sector was the most significantly affected, shrinking by four percent, while growth remained positive in the rest of the economy. Mining grew by six percent, primarily from oil and gas extraction, but such growth is unlikely in the rest of this year as Kazakhstan
adheres to oil production cuts agreed to by the Organization of the Petroleum Exporting Countries and others (OPEC+). A one-month state of emergency declared on March 15 was
subsequently extended several times to May 11th, while local quarantine measures and strict social distancing will likely continue to be applied selectively,” said the ADB experts in the report.
The government’s fiscal stimulus package, which accounts for nine percent of the nation’s gross domestic product, is expected to mitigate the economic slowdown somewhat, the bank said.
Last year, ADB and Kazakhstan celebrated 25 years of partnership. The financial institution has invested more than $5.2 billion in the country’s transportation, public sector management, finance and energy, among other sectors of the economy.
“ADB is fully committed to supporting Kazakhstan through this challenging period,” said ADB President Masatsugu Asakawa.
“The ADB will work with Kazakhstan’s authorities towards the introduction of key structural reforms going forward, including those aimed at improving public sector management, governance, and institutions, while providing access to funds for small businesses, supporting green finance, and boosting agricultural productivity,” said Asakawa.