Kazakhstan, Astana, 22 February / corr Trend K.Konirova / Echo of the fianncial crisis in the United States has affected the Kazakh economy too, consders Ben Slay, a leading economic expert of the UN Developemnt Program (UNDP)- which has specialized in economy of CIS countries over 20 years.
Trend special correspondent's interview with UNDP expert:
Question: Do you expect further increase in the world oil prices? How could the Government of Kazakhstan regulate the prices at domestic market of oil products, so as to retain the inflation?
Answer: I think the current flash of inflation was of a temporary character because it is difficult for me to imagine further rise in the world oil prices. The growth rate of the US economy has weakened considerably. Respectively, the oil prices may decrease. It means that the pressures on the economy of Kazakhstan will drop. With respect to the measures to retain the prices of oil products, it immensely depends upon the measures that the Government will adopt. Administrative measures sometimes were justified, whereas there are some undesirable results such as worsening of the quality -which should be avoided. There is another way which implies the intervention purchase of crude and oil products. During the next price rise, big consignment of the oil products are thrown to the domestic market out of the state reserve, which leads to the cut in prices.
I would repeat that there should not be any threat in connection with the further increase of oil prices, because the period strike on low price has passed a long ago.
Question: How long will this tense situation continue for Kazakhstan? Some experts forecast tough spring and autumn for the country...
Answer: The growth rate of Kazakh economy will remain on the high level- comprising 5% of GDP growth rate. It is considerable high, twice as compared to the EU and better than that in the United States. It is good, because overheating at the real estate market will end, prices of the apartments will drop and they become available. It will be possible to speak about the tough financial situation in Kazakhstan only in case of the world recession or serious drop in the economy of the United States, China and Japan occurs. Then it will be hard for all, but fortunately it is not so. Tough financial situation can occur in case the considerable mistakes are made in Kazakhstan's economic policy. I do not see any big problem, so there is no need to raise panic. Kazakhstan should be prepared to the reality of slow growth, which will define the state of the country in the coming two-three years.
Question: What is your estimation to the current financial situation in Kazakhstan?
Answer: The current financial shakes have only one peculiarity: capital outflows from the world financial centers such as New York and London, because the misuse of mortgage was observed namely in the United States and the UK. So, the capital outflows from the previous favorable centers to many developing countries, including China and Russia, but unfortunately not to Kazakhstan. At present, our country does not have the capital flow in the volume which it had in 2006. The reason is that the Kazakh borrowed too much loan long ago and it is the high time to repay it back. It resulted in cut in liquidity of the domestic market. Inflation, which was partially related to global developments, as well as the high oil and mineral prices pour oil on the flames.
At present, the capital outflow is observed in the country. A year and half ago, it led to a definite financial tension.