OIL PRODUCTION, INVESTMENT AND EXCHANGE RATE AS THE KEY DRIVERS OF KAZAKHSTAN’S ECONOMY

Abstract

The study assesses the impact of crude oil production, oil exports, inflation, Brent crude oil prices and fluctuations in the exchange rate on the real GDP of Kazakhstan. The research aim is to evaluate how these key macroeconomic variables influence on the economic growth of a resource dependent nation. The study used time series data from 1995 to 2023 and multiple regression analysis with several model specifications to understand the effects of oil related factors, exchange rates, inflation and investment on real GDP growth. Furthermore, four model specifications were utilized, a baseline model with Brent crude oil prices, exchange rates and inflation, an extended model including oil production, its alternative specification which replaces oil production with oil exports and a comprehensive model integrating investment whilst accounting for auto regressive effects. Diagnostic tests confirm the absence pf multicollinearity and autocorrelation, strengthening the validity and reliability of the findings. 

Keywords: real GDP, oil production, Brent, inflation, investment, regression analysis