Kazakhstan Ends Coronavirus State of Emergency, Turns to Economy
The Khan Shatyr entertainment center stands in Astana, Kazakhstan. (Photographer: Taylor Weidman/Bloomberg)

Kazakhstan Ends Coronavirus State of Emergency, Turns to Economy

(Bloomberg) --

Kazakhstan ended the state of emergency declared to fight the spread of coronavirus, with the central Asian nation’s leader pledging to protect the currency and urging more lending to stimulate the economy.

“We need to build a new economic structure urgently,” Kazakhstan President Kassym-Jomart Tokayev said on Monday according to a copy of his speech.

The economy of central Asia’s largest energy producer has taken a double hit from a lockdown to stem the spread of coronavirus and a collapse in prices for oil, its biggest export. The government announced nearly 6 trillion tenge ($14 billion) of stimulus measures and is providing monthly cash handouts of 42,500 tenge to 4.5 million citizens who lost incomes during the lockdown.

The central bank will seek to reduce “speculative attacks on the national currency” to help build the trust of investors and businesses in the tenge, Tokayev said. He didn’t specify what steps will be taken.

Tokayev called on banks to lend more and said Housing Construction Savings Bank will get 390 billion tenge to provide more mortgages and Development Bank will get a capital boost to lend more to industries. State holding company KazAgro should provide more financing to agriculture by introducing off-take agreements, he said.

Tokayev ordered the government to increase the local content in infrastructure projects to 60%-70% from 40%, saying the work of officials and state companies will be evaluated partly based on the domestic share in state purchases.

The nation will also consider introducing a progressive income tax, Tokayev said.

Kazakhstan will continue to gradually lift quarantine restrictions, which started May 1 with the opening of passenger flights between the two largest cities, Almaty and Nur-Sultan. Flights to regional centers will resume May 14.

“The threat of infection persists in a number of regions,” Tokayev said. “That’s why quarantine restrictions will be lifted gradually as the situation improves in each region.”

©2020 Bloomberg L.P.

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