Oil Price Shocks, Exchange Rate Fluctuations, Foreign Direct Investment Inflows, and Macroeconomic Stability: Evidence from Kazakhstan Using a Vector Autoregressive Approach

Altynai Turlybekova (), Akmaral E. Sarsenova (), Parida Baineyeva (), Ainura N. Aitymbetova (), Saken Ualikhanovich Abdibekov (), Raikhan Musamatovna Tazhibayeva () and Daniyal Duisenbek ()
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Altynai Turlybekova: South Kazakhstan Pedagogical University named after Uzbekali Zhanibekov, Shymkent, Kazakhstan
Akmaral E. Sarsenova: International Taraz University named after Sherkhan Murtaza, Taraz, Kazakhstan
Parida Baineyeva: Zh.A. Tashenev University, Shymkent, Kazakhstan
Ainura N. Aitymbetova: M.Auezov South Kazakhstan University, Shymkent, Kazakhstan
Saken Ualikhanovich Abdibekov: Kazakh National Agrarian Research University, Almaty, Kazakhstan
Raikhan Musamatovna Tazhibayeva: International University of Tourism and Hospitality, Turkestan, Kazakhstan
Daniyal Duisenbek: Cardiff University Kazakhstan, Astana, Kazakhstan

International Journal of Energy Economics and Policy, 2025, vol. 16, issue 1, 774-780

Abstract: This study investigates the interplay between oil price shocks, exchange rate movements, foreign direct investment (FDI) inflows, and gross domestic product (GDP) in Kazakhstan. Using quarterly data for 2010Q1-2024Q4, a Vector Autoregression (VAR) model is employed to capture short- and medium-term dynamics among these variables. Stationarity tests confirm that all series are integrated of order one, while lag selection criteria support a VAR(3) specification. The empirical results indicate that GDP remains largely self-driven in the short run, but its long-term variability is increasingly influenced by exchange rate fluctuations and oil prices. FDI inflows are initially persistent yet strongly shaped by oil market volatility, while the real effective exchange rate (REER) proves highly sensitive to external energy shocks. Oil prices, by contrast, remain mostly exogenous. These findings underscore Kazakhstan's structural dependence on global oil markets and highlight the need for diversification, fiscal stabilization mechanisms, and improved exchange rate management to strengthen macroeconomic resilience.

Keywords: Oil Price Shocks; Real Effective Exchange Rate; Foreign Direct Investment; VAR Model; Kazakhstan (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eco:journ2:v:16:y:2025:i:1:id:21785

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DOI: 10.32479/ijeep.21785

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