13 August 2019 14:53
Government session: socio-economic development of Kazakhstan for 7 months of 2019

According to Ruslan Dalenov, Kazakh National Economy Minister, investing in agriculture, construction, commerce and industry has risen during the first seven months of 2019. Thanks to manufacturing growth industrial production grew by a factor of 2.7% as of January this year, largely due to growth in pharmacy, machine-building, beverage, light industry and improvements in metallurgy.

"Metallurgical production has grown by 1.6% and the acceleration of minerals sector growth stood at 2.4% in January this year, with the highest growth rates in ore and non-ferrous metals production", Ruslan Dalenov stated.

Oil production slowdown has fallen. Construction has demonstrated the acceleration growth of 11.5% over the seven months. Construction works in industrial projects, roads, gas pipelines have gone up. 

"Agricultural production has showed a stable rise of 3.5% thanks to 3.5% and 4.4% growth in livestock and crop production, respectively", the Minister underlined.

Speaking of the services sector, the National Economy Minister has marked a 4.3% rise in the reporting period, outlining that there is an acceleration in all branches of this sector, with commerce showing the highest growth (7.5% rise in seven months mainly associated with an increase in vehicles, auto parts and oil products' sales). In transport there has been a 5.4% growth, with a 64.1% rise in airfreight.

Between January and July this year foreign trade has gone up by 1.7% and equaled 45.6 billion dollars, with exports of 28.6 billion dollars and imports of 17.1 billion dollars.

As for the regions, in January-July this year Kyzylorda, Western Kazakhstan and Mangistau regions are still fall behind in terms of industrial production, mainly because of reduction in oil and gas condensate production.

"All the regions have demonstrated increase in agriculture, with Akmola region at the forefront. As for construction, negative growth has been observed in Shymkent, Mangistau region and Nur-Sultan", the Minister stressed.

The National Economy Minister also has dragged attention to fix investment, saying that Shymkent, Mangistau region and Nur-Sultan have demonstrated negative growth.

Following the first seven months of the present year, there has been a positive growth rate in many indicators.

"As of July this year monthly inflation has been 0.2%, annual inflation - 5.4%", Yerbolat Dossayev, Chairman of the National Bank, stated.

Increase in food commodity prices still contribute largely to inflation, totaling at 8.7%, whereas non-food commodity prices have been demonstrating stable growth rates - 12-month inflation equals 5.9%.

Among the main risks accelerating inflation are increased consumer demand in the backdrop of increased real income.

"15 July 2019 the National Bank took a decision to maintain the base rate at 9% with a corridor of +1 percentage point", Yerbolat Dossayev said.

With a view to reduce inflation risks, the National Bank continues to impound excess liquidity on the money market as July saw the measures aimed at increasing money market rates and lengthening short-term notes resulting in increase to 43% and 75% by late May and July, respectively, in the share of notes in 6-12-month circulation. The total amount of notes was 3 trillion tenge by the end of July this year, 36.8% below the maximum of 4.7 trillion tenge.

The current base rate and monetary conditions ensure that the inflation in maintained within the target corridor of 4-6% this year.

The Chairman has outlined that the situation on the domestic monetary market is influenced largely by the external factors.

He went on to say that as of 1 August 2019 the National Bank's international reserves have equaled 27.7 billion US dollars, decreasing by 1.8% in July due to the rescheduling of the Government foreign debt. Declining monetary assets have been partially counterbalanced by increasing the gold portfolio. And, the preliminary data indicate that the National Fund's assets remain at 59.8 billion US dollar as of July this year.

"According preliminary estimates, during the first half-year of 2019 the current account has closed with a surplus of 2 billion US dollars. The trade balance has decreased by 10.3% to 11.3 billion US dollars", the Chairperson of the National Bank stated.

The import of goods has risen by 10.2% to 17.3 billion US dollars due to increase in imports of investment and non-food goods.

"To implement the President's order, the Government, the National Bank and the banks and microcrediting organizations work on the two directions. First, repaying debts amounting to up to 300 thousand tenge on collateral-free loans for socially vulnerable layers of the population. Second, writing off fines and penalties on collateral-free consumer loans levied as of 1 July 2019", he concluded.

Kazakh Prime Minister, Askar Mamin, has noted that in the wake of Head of State Kassym-Jomart Tokayev's tasks announced at the 15 July 2019 expanded Government session, the main priorities of the Government are better life standards, better income, new jobs and better investment climate.

"The plan of concrete measures approved following the expanded Government session will give a positive effect on further development of our economy", the PM stated.

The Kazakh PM called on the sectoral ministries to strengthen measures to reach the planned targets in coal and crude oil production, the chemical industry and ferrous metallurgy.

"The Governors and heads of government body and regions carry personal responsibility for reaching the final outcome and planned utilization of budgetary funds", the PM said.

The PM went on to state that to timely and effectively implement the initiatives of Yelbasy and the instructions of the Head of State on raising the wellbeing of Kazakh citizens, it is essential to continue to actively attract investments, create productive jobs, diversify the economy, increase productivity, promote exports, transfer technologies and innovations.

Adlet Seilkhanov