If stature and confidence are the making of a robust frontier-market story, then Kazakhstan may have a very good run. The local equity market has already gained about 28% in dollar terms this year. For diplomats, unfolding Kazakh-sponsored talks on the Syrian crisis spotlights the nation’s role on the global stage. For investors, the key fundamental is an attempt to sort out non-performing bank loans. A plan is now emerging to transfer reserves from the sovereign wealth fund to support finance-sector restructuring. That effort will give the economy the foundation that it needs to break out of its current lethargy. The IMF, however, may be generous in its just-revised 2.5% growth estimate for 2017. The danger is that we could see a downturn in the oil price, sapping liquidity from the largest economy in Central Asia. Kazakhstan produces about twice the amount of oil as nearby Azerbaijan. ■
Our Vantage Point: The oil-price collapse was a direct hit to the Kazakh economy. As Astana positions itself beyond geopolitical shadows, efforts to engineer growth depend on the impact of a bank restructuring program.
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Image: Talks on Syria—involving Russia, Turkey and Iran—are now being held in Astana. Credit: Lolik at Can Stock Photo Inc.