COVID-19 pandemic could lead to hike in poverty in Kazakhstan: World Bank

Xinhua News,NUR-SULTAN
2020-07-23 14:29

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NUR-SULTAN, July 23 (Xinhua) -- The raging COVID-19 pandemic could lead to a hike in poverty and inequality in Kazakhstan, and its impact on the country's economy would become the largest over the past two decades, according to a report released by the World Bank on Wednesday.

"Preliminary estimates suggest that poverty rate may rise in 2020 from a projected 8.3 to 12.7 percent -- equating to more than 800 thousand additional people living in poverty," the report said, adding that weak demand, oil prices, and the quarantine measures expose significant risks to the economic outlook.

The stimulus package can only help restore economic growth after the pandemic recedes. As a result, the country's GDP is projected to decline by 3 percent in 2020 and rebound slightly by 2.5 percent in 2021, the report said.

Inflationary pressure is expected to remain until the end of 2020 while the inflation rate is expected to top the central bank's target of 6 percent as a result of the currency depreciation and supply disruptions.

The shock to the labor market in Kazakhstan due to both the pandemic and the mitigation measures has severe implications for employment, particularly sectors that employ low skilled workers, the report said, adding that "unequal access to quality education, especially during lockdown, can negatively impact human capital development for the poor."

The report suggested that the government should redistribute resources from some state programs to improve access to education and health care and offer temporary support for workers and employers.

Sustainable economic recovery can be fueled by improved efficiency in public administration and services, including the use of e-platforms to deliver key public services, better tax administration, and the use of a review and redistribution mechanism. A renewed focus on reforms in the logistics, digital communications and financial sector could help the private sector seek new opportunities, the report added.
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