Crediting and exchange rate as determinants of economic growth in Kazakhstan

Purpose of the research: This study aims to assess the impact of corporate and consumer lending, inflation, and exchange rate dynamics on the real economic growth of Kazakhstan, measured by the Index of Physical Volume (IPV) of Gross Domestic Product (GDP). Special attention is given to identifying the compensatory role of lending under fluctuations in the tenge–US dollar exchange rate.

Methodology: The study employs annual macroeconomic data for Kazakhstan over the period 2005–2024, allowing for an evaluation of the relationship between financial and external economic factors and the dynamics of the real sector. The dependent variable is the annual IPV of GDP, which reflects changes in the physical volume of production and excludes the influence of inflation. The model includes the following explanatory variables: the ratio of corporate lending to GDP, the ratio of consumer lending to GDP, the annual inflation rate, and the rate of change of the average annual tenge–US dollar exchange rate. The use of relative indicators and growth rates eliminates scale effects and reduces the risk of spurious regression.

The relationships are estimated using the Ordinary Least Squares (OLS) method. The stationarity of time series is confirmed by the ADF test, allowing their use without additional differencing. The residual diagnostics show no autocorrelation (Breusch–Godfrey test) or heteroskedasticity (White test). Model specification validity is confirmed by the Ramsey RESET test, and the choice of the optimal model is supported by the Akaike Information Criterion (AIC). Thus, the model meets key econometric requirements and ensures statistical reliability of the estimates.

According to theoretical assumptions, lending should have a positive effect on the IPV of GDP, as it provides enterprises with additional investment resources and stimulates aggregate demand, including consumer demand. Inflation, on the other hand, is traditionally seen as a factor that constrains economic growth by reducing purchasing power and increasing costs. The impact of the exchange rate is less straightforward: depreciation of the tenge may increase import costs and thus limit output, while simultaneously enhancing the price competitiveness of exports. Therefore, the sign of the exchange rate coefficient is determined empirically.

Originality / value: Given Kazakhstan’s high dependence on imports, access to credit resources and exchange rate stability are key factors in the resilience of the real sector. The novelty of the study lies in identifying the compensatory effect of lending under exchange rate shocks, which clarifies the role of the financial sector in sustaining economic growth.

Findings: The obtained estimates indicate that corporate lending has a statistically significant positive impact on real GDP dynamics, while an increase in the exchange rate (tenge depreciation) negatively affects economic growth. Consumer lending and inflation are not statistically significant factors. The model demonstrated correct diagnostic properties and can be used for forecasting and economic policy development.

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