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Oil and Growth Challenge in Kazakhstan

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  • Nurmakhanova Mira

Abstract

CIS countries possess extensive natural resources and rely heavily on revenues from primary commodity exports, in particular petroleum and natural gas. We use Kazakhstan’s dependence on revenues from the oil sector to demonstrate commodity producer vulnerability to external commodity price fluctuations. The goal of this paper is to examine the nature of the relationship between real GDP, fiscal revenues, real exchange rate, price level, and oil prices. We employ Bayesian approach to time series data for the period 2000–2015. We find evidence of significant effect of oil prices on Kazakhstani economy where one of the key channels playing a role in the effect of oil prices on real activity is related to the real effective exchange rate. Additionally, results of this research indicate that one possible channel for oil price shocks to affect the real exchange rate is through the upward pressure on domestic price level.

Suggested Citation

  • Nurmakhanova Mira, 2016. "Oil and Growth Challenge in Kazakhstan," EERC Working Paper Series 16/06e, EERC Research Network, Russia and CIS.
    • Handle: RePEc:eer:wpalle:16/06e
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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