Kazakh finance ministry amends draft budget plan, increases funds to social welfare

ASTANA – The Ministry of Finance proposed increasing the guaranteed transfer from the National Fund to 2.7 trillion tenge (US$7.13 billion) at a March 12 governmental meeting. The change translates to an additional 250 billion tenge (US$660.26 million) to finance President Nursultan Nazarbayev’s new initiatives this year.

The 2019 national budget revenues, excluding transfers, are estimated at 7 trillion tenge (US$18.49 billion), 200.4 billion tenge (US$529.26 million) more than the pre-approved plan.

The last corrections in the draft budget were created to distribute funds in three directions. The first, social welfare, allocates 444.3 billion tenge (US$1.17 billion) to the Aleumettik Qamqorlyq (Social Care) programme, which the President mentioned at the 18th Nur Otan party congress. The second will provide 24.6 billion tenge (US$64.97 million) to support Year of Youth activities. The final direction will allocate 286 billion tenge (US$755.33 million) to fund other projects that the President proposed in his 2017, and 2018 state-of-the-nation addresses.

Aleumettik Qamqorlyq will strengthen social support, raise wages for low-paid workers and disability benefits, build rental housing for large low-income families and introduce concessional lending through the House Construction Savings Bank of Kazakhstan (HSBK), develop regional infrastructure and fund the Auyl – El Besigi (Village is the Birthplace of a Nation) project, said First Deputy Prime Minister – Minister of Finance Alikhan Smailov.

First Deputy Prime Minister – Minister of Finance Alikhan Smailov. Photo credit: primeminister.kz.

The ministry has considered enforcing the comprehensive development plans for the Turkestan region and the capital, constructing a scientific and oncological centre in the city and building the Saryarka gas pipeline from the heart of the country to Astana and later further on to Petropavlovsk, as well as measures related to ensuring the country’s security.

Regarding the general macroeconomic picture, the Ministry of National Economy has estimated 3.8-percent growth in the real gross domestic product (GDP) for 2019. GDP per capita will be $9,409. Kazakhstan’s GDP in 2018 was 58.8 trillion tenge (US$155.29 billion).

Analysts expect a higher increase in the service sector, as the domestic demand increased and other external and internal factors remain at the same approved level. The oil price is budgeted at $55 per barrel, the tenge exchange rate is estimated at 370 tenge per dollar and annual inflation target corridor is 4-6 percent.

The mining industry, however, expects a lower growth rate this year, said Minister of National Economy Ruslan Dalenov, as oil production will decrease 1.4 million tonnes or 1.5 percent compared to 2018.