Minister of National Economy says $2.3bln budget deficit awaits Kazakhstan31 october 2014, 12:41
New economic indicators show that the budget of Kazakhstan will be $2.32 billion (or 420 billion tenge) short of what was previously expected, Tengrinews reports citing the Minister of National Economy of Kazakhstan Yerbolat Dosayev.
"The 2014 national budget has been updated based on the adjusted macroeconomic forecast. Given the forecasted reduction of the GDP and imports, the national budget revenue (excluding transfers) in 2014 is estimated at 3 940.4 billion tenge ($21.8 billion), which is 420.7 billion tenge below the approved target," Dosayev said, presenting amendments to the 2014 national budget in the Majilis, the lower chamber of the Kazakh parliament.
The minister said that the greatest reduction in revenues is expected in VAT on imported goods (225.3 billion tenge or $1.25 billion) and taxes on international trade and foreign operations (173.8 billion tenge or $960 million).
He stressed that the economic slowdown was mainly caused by a decline in three sectors: in the oil industry, non-ferrous metallurgy and machinery manufacturing. Foreign trade turnover declined as well.
"Oil production has decreased to 81.8 million tons, whereas it was planned to produce 83 million tons. Exports of Kazakhstani goods will be $5.3 billion lower than expected; imports will fall by $3.6 billion. (...) The inflation rate will remain within the forecasted range of 6-8 percent until the end of the year," the Kazakh Minister said.
He said that it was proposed to increase the deficit by 164.2 billion tenge or $910 million (that is to 1 082.8 billion tenge or $6 billion) to partially compensate for the expected losses. In addition, 325 billion tenge ($1.8 billion) of additional targeted transfers will b made from the National Fund.
The state budget expenditures are projected at 7.2 trillion ($40 billion) with an increase in the approved volume by 65.5 billion tenge ($362 million).
The Minister stated that the current situation was a result of external factors negatively affecting the Kazakhstan's economy.
Since the beginning of the year Kazakhstan’s foreign trade turnover fell by 9.1 percent. Exports declined by $3.5 billion and imports by $4.6 billion dollars. Along with the decline of world prices on oil and metals, exports to Russia decreased by 20 percent. Russia is Kazakhstan’s main trade partner responsible for 36% of the Central Asian country's trade turnover, and the negative effects of Western sanctions have had their effect on Kazakhstan, too.
"Amidst lower-than-expected global economic growth and reduced foreign demand for Kazakhstani products, economic growth in Kazakhstan has slowed down. As a result, according to preliminary estimates ad of January-September this year, GDP growth made 4 percent, whereas GDP growth in the same period last year was 5.7 percent," Dosayev said.
By Dinara Urazova