IMF recommends Kazakhstan to reform banking sector
"After hitting the bottom in 2016 the economies of the region's countries have started showing a climb but it will not be high without intensive reforms. Private loans show downturn. The exchange rate of Kazakh tenge shows decline for the last year. Therefore, we consider that Kazakhstan needs to activate its work on developing non-raw-material sectors of economy, meanwhile the cost effectiveness is a high priority for all sectors", IMF Director of the Middle East and Central Asia department Jihad Azour noted.
According to IMF, the fiscal deficit in oil exporting countries is nearly 15 per cent in view of the measures to support the banking sector.
"The monetary policy needs to be reinforced by a complete use of a flexible exchange rate advantage. The financial sector vulnerability requires urgent solution. We think that the structural reforms are critical for developing and enabling vigorous growth.", Jihad Azour advised.
The IMF specialists recommend Kazakhstan to implement fiscal structural reforms as to the infrastructure and banking system. In the meantime, IMF recommends our neighbours to reform at least 5-6 items including business environment, agriculture, labour conditions, etc.
"As to supporting the banking sector, it is important to find the balance between the positive effect and complete replacement of revenues with government subsidies.", Azour comments.
IMF renders technical and consultative assistance, provides analytical work and makes up expert findings.
Nevertheless, the experts are certain that the countries need to carefully perform fiscal consolidation adapting it to peculiarities of each country individually, meeting sustained commitment and obtaining public support for the course towards the reforms.