Kazakhstan Finance Minister on budget stability26 october 2014, 22:06
Kazakhstan’s Finance Ministry is revisiting estimated macroeconomic indicators over falling oil prices, a Tengrinews.kz journalist reports, citing the country’s Finance Minister Bakhyt Sultanov as saying October 23.
“As you know, there is no such a thing as critically low oil price so far (…) Any decrease in oil prices will have a direct effect on the National Oil Fund [accumulating windfall oil revenues]. Through transfers from the National Oil Fund to the country’s budget the latter is insured against shocks related to falling oil prices. The global prices for oil will only have a direct impact on the National Oil Fund, with the impact on the economy in general being exerted through operations of oil companies”, he said when talking to journalists on the sidelines of a sitting in the country’s Majilis (lower chamber).
According to the Minister, the Government has worked out anti-crisis plans to mitigate both internal and external factors influencing the economy. “The Government has come up with anti-crisis plans, we are considering adjustments to the next year’s budget, revisiting macroeconomic indicators based on the oil price of $80 per barrel (…) there is a probability of the oil price going even further down”, he said.
According to the National Economy Minister Yerbolat Dossayev, with a possible decrease in the estimated GDP and imports, the budget revenues (excluding anticipated transfers from the National Oil Fund) are expected at $21.6 billion, $2.3 billion down from the initial plan.
The expected annual transfer from the National Oil Fund to the country’s budget will stand at $8.1 billion. Besides, the National Oil Fund Managing Board has set extra transfers for 2014 standing at $1.7 billion. With the anticipated transfers, the 2014 budget expenses are estimated at $39.5 billion.
The National Fund of Kazakhstan was created in 2000 as a stabilization fund that accumulates windfall revenues from oil sales and ensures the economy of Kazakhstan will be stable against the price swings of oil. The assets of the National Fund assets are monitored by the National Bank of the Republic of Kazakhstan. As of early August 2014 its assets made up $76.757 billion.