ASTANA – Kazakhstan’s economy has witnessed a 4-percent growth in the first seven months of 2017 and Minister of Economy Timur Suleimenov marked the overall macroeconomic stability during an Aug. 29 government meeting that focused on the main priorities of the nation’s socio-economic development for 2018-2022. The government also approved the budget for the next three years.
Macroeconomic stability is a key tenet of the third direction in the nation’s Third Modernisation, Global Competitiveness Programme set forth by President Nursultan Nazarbayev, said Suleimenov.
“The tax and budget policy is what ensures macroeconomic stability and this year the macroeconomic situation is good, as we witnessed a 4-percent growth. The current budget situation is also good,” said Suleimenov.
The economy is expected to grow 3.4 percent through the end of this year, he added. Referring to the International Monetary Fund report, he noted the global economy is projected to grow by 3.5 percent in 2017 and 3.6 percent in 2018 driven by a gradual acceleration in economic activity in advanced economies.
“If we look at key budget indicators, most importantly we cut budget deficit, which this year was 3.1 percent and next year, 1.1 percent. This is a significant decrease and in terms of macro and budget policy this is a big step forward,” he said.
The budget deficit is expected to reach 1 percent by 2019-2020, according to Minister of Finance Bakhyt Sultanov, which will allow preserving the state debt at moderate levels.
The government approved a 9,217.9 billion tenge (US$27.5 billion) state budget plan for 2018, a 134.6 billion tenge (US$401.6 million) increase above this year’s plan, noted Sultanov.
Nearly half of the budget is earmarked for social sector spending and underpinning the budget plan hike are the increase in pensions and birth allowances as well as restructuring the living wage and process of assigning pensions.
Forming the budget policy was complicated due to two fiscal limitations, he said.
“First, it is the new budget policy under which we should ensure stability and management of the state debt and in this regard we need to keep the budget deficit at around 1 percent in the next years. The state budget plan sets it at 1.1 percent for next year and at 1 percent in 2019-2020,” Sultanov said.
The budget will eventually become less dependent on the National Fund and starting in 2018 will no longer use targeted transfers from the fund.
“As you know, over the past four years we used the National Fund for targeted transfers to finance our anti-crisis programmes that supported both banking and real sectors of the economy and implement our infrastructure development programmes. It produced good results,” he added.