Government Reports on Progress, Outlines Plans for Future

Feb 28. MFA

Government Reports on Progress, Outlines Plans for FutureKazakhstan is to conduct a counter-cyclical economic policies aimed at mitigating negative external effects by actively using budgetary policies, Prime Minister Karim Masimov said at an expanded meeting of the Majilis’ faction of the Nur Otan People’s Democratic Party on February 27. The session was largely focused on the amendments to the national budget for 2012-2014.

Chairman of the National Bank Grigory Marchenko, Minister of Economic Development and Trade Bakhytzhan Sagintayev, Minister of Finance Bolat Zhamishev also took the floor at the meeting.

The Prime Minister said a consistent plan is being worked out to stabilize the economy of Kazakhstan under different development scenarios. This is also in line with one of the priority tasks set by President Nursultan Nazarbayev in his state-of-the-nation address earlier this year, Massimov said.

According to the Prime Minister, in 2012-2014, additional 180 billion tenge will be attracted from the National Fund to finance budget expenditures. The money will be used to implement social programmes. For instance, Massimov said, 36 billion tenge will be channeled towards the «affordable housing» programme, while 11.8 billion tenge will be allocated to address the issue of employment, and almost 70 billion tenge will be provided for the regional development programme.

 “The government has proposed to ensure greater flexibility in the process of formation and usage of the assets of the National Fund: in case the global economy deteriorates we will increase the funds by 15 percent to maintain stronger domestic demand, and on the contrary – if the situation gets better we will reduce them by 15 percent to prevent the economy overheating. Thus, the size of the guaranteed transfer may range from $6.8 billion to $9.2 billion,” Massimov said.

The Prime Minister also noted the volume of Kazakh exports will increase to $87.9 billion in 2012.

“Real GDP growth will be at the level of six percent, economic growth will be accompanied by an increase in welfare in 2012, according to forecasts of the Kazakhstan government. Per capita GDP is forecast to increase to $12,500,” he said.

It is expected the industrial output in 2012 will grow by 3.9 percent, the amount of work in construction will increase by 2.3 percent, and in trade by 12.7 percent. Inflation will remain in the previously forecast range of 6-8 percent in 2012.

Addressing the session, Chairman of the National Bank Grigory Marchenko summed up the results of the Bank’s activity in 2011. In his words, the GDP growth amounted to 7.5 percent last year, while per capita GDP has reached the level of $11,200. In 2011, the inflation stood at 7.4 percent.

Marchenko said last year the assets of Kazakhstan’s banks also increased by 6.5 percent, having reached 12.8 trillion tenge. The assets of the Kazakhstan insurance companies grew by 12.9 percent and reached 387.7 billion tenge. He stressed the work on further improvement of the country’s pension system is under way. Pension savings last year increased by 17.7 percent up to 2.7 trillion tenge.

Minister of Finance Bolat Zhamishev in his report mentioned the amendments to the Law “On the National Budget for 2012-2014”.

According to Zhamishev, to date the inflows to the national budget have reached 5.2 trillion tenge. In pursuance of the President’s instructions regarding the reduction of budget expenditures for activities that are not conducive to economic growth or employment of people, the government has cut its expected expenditures for this year by 25.6 billion tenge.

Zhamishev also emphasised key priorities of the budget policy embraced regional development, agriculture, industrial and innovative development, human resource management, healthcare and better quality public services. In addition, implementation of a large-scale “Employment – 2020” national programme will be launched this year.

“A total of 20 billion tenge will be allocated for the development of regions, urban agglomerations and company towns. Additional 46.9 billion tenge will be allocated for the construction and development of regional infrastructure, and 4.2 billion tenge will be allocated for the development of Zhanaozen and the Mangistau region”, Zhamishev concluded.