Publication: Kazakhstan Economic Update, Summer 2021: Turning the Tide on the COVID-19 Crisis
Date
2021-06
ISSN
Published
2021-06
Author(s)
World Bank
Abstract
Kazakhstan’s economy started to recover
in the second half of 2020, although real GDP is still lower
than pre-COVID-19. After suffering the worst contraction in
the past two decades, Kazakhstan’s real GDP rebounded in the
third quarter of 2020, and growth has extended to the first
quarter of 2021. Real GDP in Q1 2021 grew moderately at 1.9
percent in seasonally adjusted terms relative to the Q4 last
year. The external environment has generally improved and
lifted the value of Kazakhstan’s exports by about 5.8
percent in Q1 2021 compared with Q4 2020 in seasonally
adjusted terms. In Q1 2021, China experienced a
faster-than-expected economic rebound, while the euro area
suffered another dip due to the COVID-19 resurgence. This
update features findings on factors affecting the slow
productivity growth among Kazakh firms, one of the critical
development challenges. Productivity matters to sustain
long-term growth and improve the standard of living.
Findings from firm-level data analysis suggest a muted
contribution of firms’ upgrading capability (innovation,
managerial), poor allocative efficiency, and limited
contribution from entry and exit dynamics. The authorities
should consider coordinating policies to improve
productivity growth by ensuring competition in the product
market, reducing barriers for firms to entry in sectors
dominated by state-owned enterprises, improving the
effectiveness of investment policy and promotion, and
boosting firms’ capability to innovate. Also, revisiting
distortive support programs for firms should be reconsidered
to avoid perpetuating inefficiencies in firms.
Citation
“World Bank. 2021. Kazakhstan Economic Update, Summer 2021 : Turning the Tide on the COVID-19 Crisis. © World Bank, Washington, DC. http://openknowledge.worldbank.org/handle/10986/35903 License: CC BY 3.0 IGO.”