IMF Cuts Economic Growth Forecast for Kazakhstan and Central Asia
The International Monetary Fund published its new Regional Economic Outlook for Central Asia and the Middle East on October 19. The regional economy is expected to shrink 4.1% this year, which is 1.3 percentage points larger than the previous forecast in April. Amid the uncertainty as to how long the pandemic will last and when public immunization will be made possible, an economic recovery is predicted to be slow, long, and uneven. The oil price is forecasted to close the year at a rate of $41-42 per barrel, however, the oil demand will remain lower than of the pre-pandemic levels. Political instability in Kyrgyzstan caused by mass protests over vote-rigging in parliament elections and consequential resignation of President Sooronbay Jeenbekov, escalated conflict over Nagorno-Karabakh between Azerbaijan and Armenia will exacerbate the ongoing economic challenge in those regions. In this episode of IMPACTFUL with Lyazzat Shatayeva, Director of the Middle East and Central Asia Department of the IMF, Jihad Azour spoke of the measures needed to respond to the economic contraction, including fiscal and monetary policy measures, investments in new technologies and education, reforming of state-run organizations and transition to a sustainable economy.