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In January 2020, investment in fixed assets increased by 3.1% — Ruslan Dalenov

Tuesday, 11 February 2020, 11:31:16

At the government session chaired by Prime Minister Askar Mamin, the results of the socio-economic development of Kazakhstan and the implementation of the republican budget for January 2020 were considered. Minister of National Economy Ruslan Dalenov, First Deputy Prime Minister – Minister of Finance Alikhan Smailov, Deputy Chair of the National Bank Akylzhan Baimagambetov made reports.

As the Minister of National Economy Ruslan Dalenov noted, the results of the first month of 2020 showed positive dynamics of macroeconomic indicators.

“In January 2020, GDP growth accelerated to 3.6% against 2.9% in January 2019. Investments in fixed assets increased by 3.1%. Annual inflation amounted to 5.6%. This is within the target corridor of 4-6%,” the minister said.

At the same time, a positive result was achieved in all basic sectors of the economy. Construction grew by 12.5%, communications — by 9.8%, trade — by 5.2%, industry — by 4.1%, transport — by 3.6%, agriculture — by 2.6%.

Industrial production grew by 4.1%. The manufacturing industry (7.8%) is growing at a faster pace over the mining industry (2.8%). In seven regions, industry grew from 4.4% to 19.5%.

Manufacturing showed good growth. Processing rose to 7.8%. Five regions showed growth above the national average. Of these, in three regions, growth was noted from 15% to 40%. In particular, the Kostanay region showed the greatest growth due to mechanical engineering. Growth in Atyrau region amounted to 18.2% and in Turkistan region — 15.2%.

Investment growth is noted in most regions, in the whole country this figure was 3.1%. In seven regions, growth was noted from 20 to 76%. The greatest growth was shown in the East Kazakhstan region — 1.8 times.

Among the basic sectors of the economy, the largest growth was noted in the construction sector, amounting to 12.5%. The greatest growth was shown in Turkistan region — 80%. This reflects the active development of Turkistan as a regional center. Above 5% growth (target growth) was demonstrated in six regions.

In January 2020, 732 thousand square meters of housing were commissioned. The largest housing commissioning is observed in the capital and Almaty, as well as in the Mangystau region.

In agriculture, the growth was 2.6%, including livestock production grew by 2.8%. On the whole, in agriculture in five regions, growth was noted above the national average.

The contribution of regions in ensuring economic growth is as follows. In the Kostanay region, 5 indicators out of 6 show outstripping rates in relation to the average republican levels. For 5 indicators, growth is observed above the national average in the Pavlodar, East Kazakhstan, Mangystau and Atyrau regions.

Dalenov noted that at the beginning of this year at an extended meeting of the Government, the Head of State gave a number of instructions. In this regard, the Government has identified target indicators that must be achieved in 2020.

First of all, the tasks for the current year are:

  • ensuring GDP growth up to 4.7-5%, this is 0.2 pp higher;
  • bringing the volume of investments in fixed assets to 20% and the share of SMEs to 30% of GDP;
  • increase in non-oil exports to $18.6 billion, that is, an additional $3.4 billion;
  • commissioning of 15 million square meters of housing, an increase of 1.9 million square meters of housing;
  • creation of 430 thousand jobs;
  • increase in real incomes of the population by 6%.

“In general, ambitious goals have been set. There are all the necessary resources for this. Active work is being carried out today,” Dalenov concluded.

First Deputy Prime Minister – Minister of Finance Alikhan Smailov reported that the state budget revenues for the first month of this year executed by 104.8% of the plan of the reporting period, including revenues of the republican budget — 86.8%, local budgets — 153%. The republican budget received revenues in the amount of 331 billion tenge.

“Own revenues of local budgets exceeded 75 billion tenge and amounted to 217 billion tenge. The main share of the overfulfillment amount of 68 billion tenge falls on taxes,” Smailov said.

It should be noted that in all regions the revenue plan has been exceeded, since at the beginning of the year local budget revenues are planned below. It was also influenced by the inclusion in the income of local budgets of CIT from medium and small businesses. In the reporting period, this tax received 27 billion tenge.

As Smailov informed, the state budget expenditures for the reporting period amounted to 1 trillion 50 billion tenge. Compared to the same period last year, they grew by 5.1%. The republican budget expenditures amounted to 1 trillion 18 billion tenge, or 94.3% were fulfilled. Expenditures of local budgets amounted to 213 billion tenge.

Also under control are the public procurement procedures and the use of budget expenditures.

“In January, 159 audit activities covered 96 billion tenge of budget funds. As a result, financial violations amounting to 39 billion tenge were identified. Violations in the amount of 33 billion tenge were eliminated by restoring the supply of goods, providing services and performing work, reimbursing the budget and reflecting accounting,” Smailov said.

During the reporting period, cameral control covered 396 thousand public procurement procedures totaling 1 trillion 730 billion tenge.

The first deputy prime minister and minister of finance noted that the main tasks of the current year are ensuring the completeness of budget revenues and expenditures, implementing a pilot project for a unified organizer of public procurement, digitalizing business processes in tax and customs spheres, and drafting a revised republican budget for the current year.

In turn, the Deputy Chair of the National Bank Akylzhan Baimagambetov said that in January 2020, annual inflation was 5.6%. Non-food annual inflation was 5.2% compared to 5% last month due to higher gasoline prices due to higher excise taxes.

“Food inflation slowed down in January 2020 to 9.2% in annual terms compared with 9.6% in December 2019 due to a decrease in the growth rate of prices for fruits and vegetables, meat and meat products, bakery products and cereals, fish, oils and fats. Thus, the contribution of the price increase of these products to inflation, which was observed last year, is gradually decreasing, and food inflation is expected to slow down in 2020,” Baimagambetov informed.

In these conditions, Feb. 3, the National Bank decided to maintain the base rate and its interest rate band at 9.25%. The current level of the base rate when taking measures by the Government and local executive bodies to increase competition in food markets and pursue an optimal tariff policy will ensure the achievement of inflation targets.

According to the deputy chair of the National Bank, the preliminary data shows that foreign exchange reserves for January 2020 increased by 1.2% to $29.3 billion mainly as a result of operations with gold and an increase in its price.

The volume of deposits at the end of December 2019 amounted to 19 trillion tenge, an increase over the month by 4%. Deposits in national currency grew by 4.1%, in foreign currency — by 3.9%. As a result, the level of dollarization of deposits decreased to 43.1% in December 2019 compared to 48.4% in December of the previous year.

“Rates on deposits in tenge continue to remain more attractive and reach 14.5% compared to 2% in foreign currency. Credits to the economy in December 2019 increased by 1.4% to 13.9 trillion tenge, including loans to businesses increased by 1.2%, to households — by 1.6%,” Baimagambetov informed.

As part of the implementation of the program 7-20-25 on Jan. 30, 2020, 15,134 applications for 173.4 billion tenge were approved, of which 12,777 loans worth 146.8 billion tenge were issued.

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