Economy News in Brief

On June 19, President Nursultan Nazarbayev approved amendments to state budget for 2013-2015. The head of state signed the Law of the Republic of Kazakhstan “On Introduction of Amendments and Additions to the Law of the Republic of Kazakhstan on the National Budget for 2013-2015,” aimed at clarifying the macroeconomic development of the country this year. The revised forecast of real GDP growth in 2013 remained at the earlier forecasted level (6 percent), but the forecast for nominal GDP growth dropped from 15.8 percent to 13.5 percent. The forecast for the average oil price in 2013 was increased from $90 to $100 per barrel. Inflation projections remained at the earlier forecast of 6 to 8 percent by the end of 2013. Transfers to the state budget were increased by 27.206 billion tenge ($178.2 million) to 1.544 trillion tenge ($10.1 billion) due to transfers from the National Fund in the amount of 25.5 billion tenge ($167 million) and transfers from regional budgets in the amount of 1.7 billion tenge ($11.1 million). The state budget’s expenditures for 2013 were decreased by 121.288 billion tenge ($794.4 million) and approved at 6.099 trillion tenge ($39.9 billion). The budget deficit for 2013 was increased by 85.397 billion tenge ($559.3 million) and hit 870.573 billion tenge ($5.7 billion) or 2.5 percent of GDP.

Alberta Agriculture Minister Verlyn Olson was struck during his 10-day trade mission to Kazakhstan in May by the country’s similarities to Alberta. The Kazakhstan government has set aside $900 million to invest in its agriculture industry over the next few years. That’s equivalent to the value of 75,000 heads of cattle. “This country has great oil wealth,” Olson said. “They definitely have money to spend and are wanting to diversify away from their oil economy.” Exports of Alberta agricultural goods to Kazakhstan, mostly cattle, pigs and horse meat, jumped to $5 million last year from $875,000 in 2011. However, a trade mission to Kazakhstan in 2012 was estimated to have generated an additional $25 million in livestock, genetics and goods and services. Alberta Livestock and Meat Agency board chair Dr. David Chalack said there are tremendous opportunities in Kazakhstan, especially in the cattle industry. Gordon Stephenson, general manager of the Canadian Hereford Association, has been to Kazakhstan three times, including the latest trade mission with the federal and Alberta agriculture ministers. About 4,000 head of Hereford genetics have been exported to Kazakhstan and Russia in the last four years.

Kazakh Minister of Economy and Budget Planning Yerbolat Dossayev does not exclude the possibility of increasing the state’s share of the Eurasian Natural Resources Corporation (ENRC). “The government is considering ENRC as one of the most important mining assets of our country, so we suppose an active participation of the state in this company,” Dossayev said. However, according to the Minister, the government has not entered into a deal on acquisition yet. ENRC is a leading diversified natural resources group, performing integrated mining, processing, energy, logistics and marketing operations. The operations comprise: the mining and processing of chrome, manganese and iron ore; the smelting of ferroalloys; the production of iron ore concentrate and pellet; the mining and processing of bauxite for the extraction of alumina and the production of aluminium; the production of copper and cobalt; coal extraction and electricity generation; and the transportation and sales of ENRC’s products. ENRC’s production assets are largely located in the Republic of Kazakhstan; other assets, notably the Other Non-ferrous Division, are mainly located in Africa; ENRC also has iron ore assets in Brazil. Each of the founders of ENRC, Alexander Mashkevich, Patokh Shodiev and Alijan Ibragimov holds a 14.59 percent share of the company. The Kazakh government’s share in the company is 11.65 percent. Some 26 percent of the company is owned by Kazakhmys Corporation. The remaining 19 percent of shares are owned by minority shareholders.

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