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Kazakhstan to revisit its 2015 budget with falling oil prices in mind

21 october 2014, 10:05
First Vice PM Bakytzhan Sagintayev. ©tengrinews.kz
First Vice PM Bakytzhan Sagintayev. ©tengrinews.kz

 Kazakhstan’s budget will be reviewed with a possible oil price at $80 per barrel, a Tengrinews.kz journalist reports, citing Bakytzhan Sagintayev, the country’s Vice PM as saying.

“We see oil prices falling worldwide. If I am not mistaken, yesterday the price stood at $82-83 per barrel. Therefore we are revisiting the 2015 budget based on the oil price of $80 per barrel”, he said, adding the Government could foresee a scenario based on the oil price of $60 per barrel as well.

Baiterek Holding Company Chairman Kuandyk Bishimbayev told journalists there had been signs of the economic slowdown. “Consumer confidence index is on the decline. People are spending less. Companies are opting for cutting down on their investments. There are certain signs of economic slowdown. For the 9 months of the year the country’s economy has only grown by 4%. The Government is doing its best to support entrepreneurship with affordable loans”.

He emphasized Kazakhstan had a certain safety margin. “I believe Kazakhstan overcame the toughest challenges back in 2007-2010. There is a certain safety margin. The country’s banking sector has tackled all the hardships and become stronger. If you remember, back in 2008-2009 the construction sector was badly hit. Now the industry is working on other principles. I believe this time it will be easier for the nation to handle hardships. Since 2007 the country’s National Oil Fund assets coupled with gold and FX reserves have grown to exceed $100 billion. The safety cushion is much more reliable”, he said.

The current oil prices have made experts admit the situation for many exporters of hydrocarbons has been critical. According to some estimates, with the prices going further down the tenge, Kazakhstan’s national currency, may face a minor depreciation.

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