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Kazakh National Fund grows despite drop in oil prices: Minister of Finance

22 december 2014, 18:13
0
Photo © RIA Novosti
Photo © RIA Novosti

Despite the drop in oil prices, Kazakhstan’s National Fund continues to grow, Tengrinews reports citing the country's Minister of Finance Bakhyt Sultanov.

The Kazakh Minister of Finance met journalists on the sidelines of the meeting dedicated to implementation of the goals set forth in President Nazarbayev’s state-of-the-nation address last week.

According to Sultanov, the current situation in the world economy with the drop of the Russia ruble and oil prices would affect the revenues of the National Fund. “We have strict regulations concerning the interaction between the budget and the National Fund,” Sultanov said. Annually, the National Fund allocates 8 billion for the state budget. “In difficult times we can request 15% more from the National Fund. We have requested additional funds for 2015. In general, the budget stabilizes through the additional funding from the National Fund. Certainly, the revenues of the National Fund have decreased. However, the National Fund continues to grow despite the decrease in prices,” the Minister of Finance of Kazakhstan explained.

The National Fund of Kazakhstan, also known and the Oil Fund, 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, gas and metals. 

As of October 1, 2014 the oil fund contained $76.2 billion, as of July 1, 2014 they made $76.6 billion, and as of May 1, 2013 they made $75.8 billion. This does confirm that in spite of the massive anti-crisis spendings from the Nation Fund it has not been dwindling, but the grows is also minor.   

Sultanov touched on the effect the drop of the ruble would have on the Kazakhstani economy and local producers.

“There are a lot of factors. For example, the drop of the demand for goods decreases the prices. Today, considering the drop of oil prices, we will observe a certain alignment of production costs of various goods and services. Countries that import energy resources will benefit. They will have an addition opportunity to decrease the production costs of goods in their countries. In turn, this will affect countries that export energy resources. This will trigger certain economic processes. Our goods and services too will face challenges. That is why we will have to consider each sector and each enterprise separately,” Sultanov concluded.

Meanwhile, the International Monetary Fund (IMF) believes that the sliding Russian ruble doesn't have any substantial effect on Kazakhstan's economy.

Reporting by Assel Satayeva, writing by Gyuzel Kamalova, editing by Tatyana Kuzmina


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