In accordance with the Article IV in the period between November 4 to 17, 2021 the visit of the International Monetary Fund (IMF) Mission led by Nicolas Blancher - Head of the IMF Mission to Kazakhstan took place. As part of the visit, meetings were held with the heads of the National Bank of Kazakhstan, state entities, quasi-public sector organizations and the financial market.

In the IMF’s view, decisive and timely measures taken by the National Bank, the Government and the Agency for Regulation and Development of the Financial Market, in response to the Covid-19 pandemic have played a key role in absorbing external shocks and in subsequent recovery of the economic activity. This led to an increase in real GDP by 3.5% since the beginning of the year and a return to a pre-pandemic trajectory of economic development.

The IMF commended the National Bank's commitment to inflation targeting policy. In particular, the Mission noted further progress in the area of monetary policy independence, positively assessed the work on improving transparency, on developing analytical capacity in decision-making, and emphasized further improvement of monetary policy efficiency in accordance with the Monetary Policy Strategy 2030.

According to experts of the international organization, inflation, which amounted to 8.9% in October this year, may remain high in the short term due to increased domestic demand and supply disruptions in world markets. The IMF mission approves the gradual increase in the base rate in recent months.

In order to further stabilize and reduce inflation, the IMF considers it important to continue coordinating measures to implement monetary and fiscal policies, as well as government measures to mitigate the effects of supply chain disruptions. At the same time, the Mission's experts expect inflation to return to the National Bank's target corridor by the end of 2022, predicting its reduction to 6%.

The IMF mission supports state entities’ intention to make fiscal policy more countercyclical, and to implement new budget rules to ensure fiscal sustainability and equitable distribution of wealth across generations.

The IMF experts praised the ongoing work to maintain financial stability, to strengthen financial supervision, noting the importance of capacity building in the implementation of regular assessment of asset quality and stress testing.

The Concluding statement of the IMF mission was prepared based on the results of the visit. The document is published on the websites of the IMF and the National Bank.

The next visit of the IMF Article IV mission consultations will take place in 2022.

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