The steep decline in global oil prices is stoking angst in Kazakhstan. Experts and officials alike say the government has ample resources to grapple with fiscal surprises. The real question is whether the political will exists for the government to take necessary measures.
Economic storm clouds have been gathering for a while over Kazakhstan, starting with February’s currency devaluation, followed by the fallout from an economic slowdown in Russia, caused in large part by Western sanctions. Now, in a triple whammy, slumping oil prices threaten to put a big dent in Astana’s best-laid budget plans.
The government’s fiscal woes have been compounded by news that the giant Kashagan oilfield will not be starting production this year. Officials had been counting on Kashagan revenue to help fill state coffers in 2014.
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Joanna Lillis is a freelance writer who specializes in Central Asia.