The Effect of Monetary Policy on Consumption: The Case of Kazakhstan

Abstract

This research challenges the implications of the monetary policy in Kazakhstan. Major economic variables, including disposable income, interest rates, and CCI, are taken into analysis. The study investigates the relationship between independent variables and consumption through the OLS regression model. The data were collected quarterly from 2010 to 2023 and were collected from the National Bank of Kazakhstan and The Bureau of National Statistics (secondary data). Based on the result, 1% increase of the REER decreases consumption by 1.81% change, while an increase of income by 1% increases the consumption of households by 0.4%. These results are of particular importance to subjects who work in the field of finances and banking, and to economic strategists and decision-makers whose job it is to develop an environment for stabilization and growth of the economy. This research will be useful in establishing the current economic landscape and developing a data-grounded basis that future policy formulations can be based on concerning enhancing consumer spending and, consequently, overall economic welfare within Kazakhstan. The research is recommended for both students and practitioners who are interested in the details of how financial situations impact consumption, and also for the critical insights guiding policy and strategic economic decisions in developing economies such as Kazakhstan.