Republic of Kazakhstan: Financial Sector Assessment Program-Technical Note on Climate-Related Risks and Financial Stability
IMF Staff Country Reports, April 24, 2024
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Bibliographic details
- Published: April 24, 2024
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400273629.002
Overview and scope
- Publication date: April 24, 2024
- Format: IMF Staff Country Reports; Country Report No. 2024/096; Issue: 096; Volume: 2024; Pages: 42
- DOI: https://doi.org/10.5089/9798400273629.002
- Stock No: 1KAZEA2024006
- ISBN: 9798400273629
- ISSN: 1934-7685
- Subject keywords: Climate change, Climate policy, Climate-related TRANSITION, cost of goods sold, FSAP finding, Global, IMF-World Bank Financial Sector Assessment Program, Kazakhstan's greenhouse gas emissions
Key findings on risks and impacts
- Domestic and global climate policies are expected to negatively affect Kazakhstan’s economy, its firms, industries, and banks, with heterogeneous impacts across industries and banks.
- The analysis focuses on transition risk, but Kazakhstan also faces physical risks that require further assessment.
- The intensity and frequency of floods and droughts in Kazakhstan are expected to increase with climate change.
- Floods and droughts can affect:
- crop yield and production,
- energy system operation,
- major infrastructure,
- and result in significant economic losses.
- Climate change, together with the onset of El Niño, will greatly increase the likelihood of extreme events in the next five years and increase physical risk in the near term.
Analytical gaps and data needs
- Improving and harmonizing data can be the first step to:
- enhance interagency coordination,
- assess climate-related risks,
- and enable rigorous analysis across transition and physical risk channels.
Policy recommendations and capacity building
- Given the potential for substantial risks associated with climate change and climate mitigation actions, the authorities should develop capacity to conduct climate stress testing.
- Strengthening interagency coordination and data harmonization is recommended as an early priority to support risk assessment and policy design.
- Further assessment of physical risks (beyond the transition-risk focus of this analysis) is advised to capture the full spectrum of climate-related exposures.
Implications for the financial sector
- Heterogeneous impacts across industries imply heterogenous risk exposures across banks, necessitating:
- bank-level and system-level analysis,
- tailored risk management approaches,
- and integration of climate scenarios into supervisory and risk-assessment frameworks.
Republic of Kazakhstan: Financial Sector Assessment Program-Technical Note on Climate-Related Risks and Financial Stability, IMF Staff Country Reports (Country Report No. 2024/096), April 24, 2024.
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