Economic news in brief

State budget revenues decreased by 5.6 percent to 8.3 trillion tenge (US$22.18 billion) from January-September, reported finprom.kz. The main factor was the 34.4-percent decrease in transfers, or 1.3 trillion tenge (US$3.47 billion). In the corresponding period during the past five years, the maximum increase in state budget revenues was 34.6 percent in 2017. This was mainly due to transfers that almost doubled last year. For the first nine months of 2018, the main share of state budget revenues was 5.6 trillion tenge (US$15.2 billion) in tax revenues (a 67-percent share of all revenues). The share of transfers to budget revenue was 30.3 percent.

Kazakhstan is becoming the centre of investment attraction within the Eurasian Economic Union (EAEU). In the first half of the year, the union financed $864 million in Kazakh projects, 37 percent more than a year ago. Foreign trade between nations has rapidly increased. Last year, Kazakh trade turnover with countries in the EAEU was $17.8 billion (28.9 percent increase). In the first eight months of 2018, trade has already reached $12.3 billion. At the same growth rate, trade may increase by 3-5 percent year-on-year by the end of the year. The share of EAEU investments is currently 7 percent of the total gross foreign investment, or $12.3 billion.

The dynamic start of trading on the new Astana International Exchange (AIX) has served as a mechanism for quickly attracting equity and debt capital. In domestic capital, AIX trading volume was 503.3 million tenge (1.36 million) during the first trading session. Kazatomprom conducted 381 trade transactions on its shares. At the same time, there is a shortage of liquidity in the capital market. As of July 1, the ratio of market capitalisation of equity and bond markets to gross domestic product (GDP) is 31.6 percent and 15.4 percent, respectively, which is significantly lower than the world practice of developed countries (40-45 percent for the stock market and 130-135 percent for the bond market).

Although foreign direct investment has been growing, the loan portfolio of second-tier banks decreased by 13.2 percent at the end of June. This occurred as Kazakhstan’s financial sector continues to shrink. The country’s banks had a loan portfolio volume of 13.2 trillion tenge (US$35.70 billion) in the past year, which is 24.8 percent in relation to GDP. The demand for insurance products continues its steady decline. The average Kazakh has 15,600 tenge (US$42.20) of insurance per year, which is only 0.5 percent of GDP per capita. The total volume of bank loans to GDP is 25.6 percent. In current market conditions, banks are forced to concentrate on retail lending and funding. At the end of September, loans to individuals were 5.1 trillion tenge (US$13.79 billion), or 40.2 percent of all bank loans directed to the Kazakh economy.

Kazakhstan produced 25,897 vehicles, including cars, trucks, buses, special vehicles and trailers, with a total value of 162.9 billion tenge (US$440.60 million) from January-October, according to KazAvtoProm, the Union of Automotive Enterprises. The output volume in physical terms surpassed last year’s figure by 72.1 percent, reported inform.kz. Passenger car production comprised a significant bulk of total production, increasing 86 percent to 24,155 units. At the same time, production of buses decreased 2.2 times (249 units), while trucks (882 units) and specialised vehicles (163 units) decreased by 21 percent and 12.8 percent, respectively.

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