2016 was a landmark year for Kazakhstan. It marked the 25th anniversary of the independence of Central Asia’s largest country and establishment of diplomatic relations with Japan. This year, with the hosting of the World Expo, the oil-rich republic wishes to highlight its accession to the World Trade Organization and its commitment to global peace and economic globalization.
Just as Japanese Prime Minister seeks closer partnerships with countries around the world as part of his economic stimulus program, Kazakhstan President Nursultan Nazarbayev unveiled his own comprehensive development plan, dubbed “Nurly Zhol” (Bright Path), aimed at raising the standard of living for17 million Kazakhs.
Tentatively schedule for publication in September 2017, the Special Report on Kazahkstan will highlight the country’s role as a regional leader and its importance as a strategic partner of Japan, as well as other countries around the world.
The global economic slowdown, coupled with U.S. sanctions on Russia, shocked the economy of Kazakhstan, which is mainly driven by oil and gas. And among the biggest casualties was the country’s currency, the Kazakhstani tenge.
But, prudent monetary policies have finally brought about stability and economic recovery.
In August 2015, the National Bank of Kazakhstan unpegged the tenge to the dollar as an initial step. But, a slump in global oil prices nearly neutralized the government’s objective because the value of the national currency fell more than half.
“In June last year, inflation surged to 17.7 percent and the economy began slowing down. We were able to achieve our goal of maintaining inflation within the 8% range at the beginning of this year,” said Governor Daniar Akishev.
Inflation has stabilized and the economy posted a 4.5 percent annualized GDP growth.
The central bank also implemented other measures to consolidate the progress achieved, such as improved dissemination information to the public and greater transparency about the bank’s activities. The move has inspired more confidence in the central bank among Kazakhstanis.
Today, instead of seeking refuge in stronger denominations, such as the U.S. dollar and the euro, Kazakhstanis have begun selling their foreign currency and increasing their local currency accounts.
“This is is an indication that the people regained their trust in the tenge,” Akishev said.
“There is still a lot of work to be done in terms of strengthening the tenge. But with new monetary policies and our efforts to enhance the National Bank’s credibility, I am confident we are right on track in reining in inflation to 4 percent by 2020,” he added.