Kazakhstan to stop drawing on oil fund for crisis

Today, 09:12 | Reuters

Kazakhstan to stop drawing on oil fund for crisisASTANA, Sept 14 (Reuters) – Kazakhstan will no longer tap its $23 billion oil fund to fight the economic downturn, Economy Minister Bakhyt Sultanov said on Monday, signalling growing government optimism on the prospects for recovery.

“Although 2010 will remain a crisis year for the global economy, which will also affect our economy, we have suggested using the budget’s internal resources to continue those (anti-crisis) measures,” Sultanov told the parliament.

The Central Asian state has tapped the fund, replenished by oil revenues, in 2008 and 2009 to finance part of its $19 billion anti-crisis state aid package.

The government expects the economy to grow by 0.1 percent this year despite shrinking 2.5 percent in January-July. But a fully fledged recovery will only begin next year, officials have said, as the aid package reached all targeted sectors.

Sultanov said that without the crisis drawdowns, the oil fund would grow to $31 billion by the end of 2012.