On November 11, 2022, a dialogue on the economy took place in Astana
14.11.2022
Experts of the Economic Research Institute took part in the round table "Dialogue on Economics. Kazakhstan in a New Reality".organized by Jusan Analytics. Representatives of government agencies, the National Bank of the Republic of Kazakhstan, the World Bank, business, the expert economic community and academic circles also joined the event.  Employees of the Center for Competitive Environment Research, the Center for Macroeconomic Research and Forecasting, the Center for Trade Policy Development and the Center for World Economy Research participated in the event on behalf of ERI. One of the key challenges facing Kazakhstan, along with the geopolitical confrontation and the disruption of logistics, the participants unanimously recognize the prevailing inflation (more than 18%). A heated debate broke out about the preferred method of overcoming it.  Rustem Orazalin, Director of the Monetary Policy Department of the National Bank of Kazakhstan: "The National Bank is determined to fight inflation and price instability. Since the last update in October, the potential for an increase in the key rate has remained. At the same time, the expectations of society have a strong influence on future inflation." Askar Kyssykov, Deputy Director of the Center for Analytical Research "Talap": "The base rate in the Republic of Kazakhstan does not affect anything, given its import nature – it is pointless to keep the rate at a high level in our case." Sjamsu Rahardja, World Bank Senior Economist for Trade and Competitiveness: "Assessing the nature of inflation in Kazakhstan, it is also necessary to pay attention to significant extra-budgetary expenditures." Timur Zharkenov, Deputy Chairman of the Board of NCE RK "Atameken": "One increase in the key rate will not solve the problem of inflation – we need comprehensive measures to develop and support business." Zhanybek Aigazin, AERC CEO: "Are we ready, following the example of Turkey, to give priority to economic growth instead of controlling inflation – will Kazakhstan have enough export potential for this? It is advisable to solve the problem of high inflation first." The debate over which is more important – growth or inflation – led to a discussion of the problems of the real sector, in particular, the creditworthiness of the population (73% of consumer spending), the raw nature of the economy (60% of exports – oil), high import dependence (80% of non-food products – imports).  They particularly focused on the unavailability of credit funds for a wide business. Eldar Shamsutdinov, author of the telegram channel "Comment": "The real sector has practically not been credited since 2015 - consumer loans are more profitable for banks." Zarina Adilkhanova, Senior researcher at the NAC Analytica Center for Economic Modeling: "In addition, state subsidies for various programs are allocated to a limited circle of "chosen ones". However, such favoritism does not lead to productivity growth." Nurgul Khaidarova, Director of the ERI Center for Competitive Environment Research: "We should also pay attention to a serious regional imbalance in business lending. Of the 21 trillion tenge of loans issued by STB to legal entities and individuals for 9 months of 2022, Almaty accounted for 44%, Astana – about 14%, Shymkent – 5% and the Karaganda region before the division – 5%." The expert also presented other key findings of the ongoing ERI study on the availability of financial resources for SMEs: high interest rate, strict collateral requirements (especially relevant for villages and small towns), lack of corporate lending outside regional centers and large cities, etc. According to the results of the round table, no ready-made solutions were developed, but all participants noted the usefulness of such a format for exchanging expert opinions and assessments. The materials of the round table will be published by th.organizers of Jusan Analytics.
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