THE IMPACT OF OIL PRICE SHOCK ON AN OIL-EXPORTING SMALL ECONOMY: A CASE STUDY OF KAZAKHSTAN
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Date
2023
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Nazarbayev University Graduate School of Business
Abstract
This study investigates the economic impact of external oil price shock on an oil
exporting small economy in the case of Kazakhstan. The analysis is conducted
using the SVAR model. Monthly data is used including the period from 1
January 1999 till 1 May 2023. The study demonstrates that an oil-exporting
small country, such as Kazakhstan, is affected by global fluctuations in oil
prices. The findings indicate that a rise in oil prices has a negative impact on the
trade balance, leading to an immediate increase in the subsequent months. The
real effective exchange rate exhibits occasional fluctuations but normally
remains within a narrow range. Inflation experiences an initial rise during the
first period (the impact period), followed by a subsequent decrease within a
span of 5 months. The industrial production index exhibits a more prominent
reaction to the oil price shock after a certain period of time, suggesting that
fluctuations in oil prices may have a delayed impact on industrial production
index.
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Citation
Aimanbetova, S. (2023). The Impact of Oil Price Shock on an Oil-Exporting Small Economy: A Case Study of Kazakhstan. Nazarbayev University Graduate School of Business