## Republic of Kazakhstan: Financial Sector Assessment Program-Technical Note on Climate-Related Risks and Financial Stability

_IMF Staff Country Reports, April 24, 2024_

## Source details

**Canonical URL:** [Republic of Kazakhstan: Financial Sector Assessment Program-Technical Note on Climate-Related Risks and Financial Stability](https://www.imf.org/en/publications/cr/issues/2024/04/24/republic-of-kazakhstan-financial-sector-assessment-program-technical-note-on-climate-548289)

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## Bibliographic details
- Published: April 24, 2024
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400273629.002

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### 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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_Source: https://www.imf.org/en/publications/cr/issues/2024/04/24/republic-of-kazakhstan-financial-sector-assessment-program-technical-note-on-climate-548289_