COVID-19 Pandemic as a Factor of Public Debt Increase. The Case of Kazakhstan in the Global Context
One of the main effects of the COVID-19 pandemic is a significant aggravation of the debt burden in most countries of the world, due to increased costs to support the economies. In Kazakhstan, similar problems also caused a significant increase in the volume of public debt and expenses for its servicing, while due to the specifics of the country’s economic model, the channels of influence of the pandemic on the debt sector were more numerous because of the impact of external shocks. The growth of government debt and the debt servicing cost during the pandemic years was affected by such factors as the growth of budget’s expenditures to support the economy; a drop in revenues due to lower oil prices; the devaluation of the tenge and growth of the cost of servicing external debt; increase of interest rates in the domestic debt market. A comparison of the parameters of public debt increase and loss of economic growth based on the ratio of these two indicators is proposed as a generalized indicator of the effectiveness of debt buildup during the pandemic. This approach showed that the debt increase in Kazakhstan was quite effective. Nevertheless, the effects of the fight against the pandemic had a serious negative impact on Kazakhstan’s public finance system, and in the debt sphere the main problem now is the escalation of debt servicing costs, which will be a significant burden on the budget process, at least for the next few years.