In the first nine months of 2019, Kazakh National Fund’s assets reached $59.34 billion, a 2.3-percent increase year-on-year (yoy). The assets reached a 34-percent share of the gross domestic product (GDP) in 2018, exceeding the 30-percent minimum balance level. In early August, President Kassym-Jomart Tokayev signed a decree pursuing a policy to diversify the assets. To increase long-term expected returns, the savings portfolio transitioned from a conservative distribution (80 percent bonds, 20 percent shares) to a balanced distribution (60 percent bonds, 30 percent shares, up to 5 percent alternative instruments and up to 5 percent gold).
From January-October, fixed asset investments in art, entertainment and leisure reached a record 118.9 billion tenge (US$309.27 million), a 53.5-percent increase year-on-year (yoy) and 1.2 percent share of all fixed asset investments. One-quarter of the investments are in Nur-Sultan. The top three regions, which also include the East Kazakhstan and Almaty regions, account for almost 59 percent of all investments in the field. A noticeable increase in the investment portfolio resulted from a 93.5-percent increase (up to 54 billion tenge (US$140.46 million)) in own fund investments, 45.4 percent of the total volume of capital investments in the field.
As of October, 436,500 small companies are registered in Kazakhstan, a 2.3-percent increase year-on-year (yoy). The number of operating companies increased 10.1 percent to 294,000. Accordingly, the share of small operating enterprises from registered companies increased from 62.6 percent to 67.4 percent. The number of operating small businesses has increased in all regions, with Nur-Sultan showing the most noticeable growth of 15.1 percent to 49,300. The Turkestan Region and Shymkent had the highest growth rates of 14.5 percent and 14.4 percent, respectively. One-quarter of all operating companies are in Almaty.
At the end of October, Kazakh second-tier banks loaned 257.8 billion tenge (US$670.56 million) to agricultural entities compared to 495.1 billion tenge (US$1.29 billion) in 2018. The Almaty Region provided almost half (48 percent) of the loans, followed by the Akmola (25 billion tenge (US$65.03 million)) and Kostanai (23.1 billion tenge (US$60.09 million)) regions. The loan reduction was caused by the banks’ high average lending rate (12 percent and higher) and stringent requirements on borrowers’ collateral base. Small enterprises comprised the largest share (97.5 percent) of agricultural borrowers during the ten-month period.
In the first ten months of the year, metal ore mining reached 1.6 trillion tenge (US$4.16 billion) and the industrial production index was 115.8 percent (104.6 percent in 2018). In 2018, metal ore production value was slightly less than 1.5 trillion tenge (US$3.90 billion). Non-ferrous metals accounted for more than 78 percent of total production. The Kostanai Region led in metal ore production with 378.6 billion tenge (US$984.78 million), of which 309.4 billion tenge (US$804.8 million) was iron ore and 69.2 billion tenge (US$179.99 million) non-ferrous metals. The East Kazakhstan Region, the second biggest producer, extracted 334.4 billion tenge (US$869.81 million) in non-ferrous metal ores. The Aktobe Region closed the top three with 247.5 billion tenge (US$643.77 million), of which 242.8 billion tenge (US$631.55 million) is non-ferrous metals and 4.6 billion tenge (US$11.96 million) iron ores.
Automobile and urban electric transport company income across Kazakhstan increased from 204 billion tenge (US$530.62 million) to 222 billion tenge (US$577.44 million) from January-October. The income share of all transport enterprises is 8.8 percent for the second year in a row. Goods transportation in the industry was 61.9 percent or 137.4 billion tenge (US$357.39 million). Accordingly, the revenue share of passenger traffic decreased to 38.1 percent, or 84.6 billion tenge (US$220.05 million).
The Kazakh National Bank recently maintained the base rate at 9.25 percent per annum while maintaining the interest rate band at +/- 1. Annual inflation is below the expectations of the National Bank. Real GDP growth is gradually accelerating. Given the current decision on the base rate, inflation is expected to develop within the target corridor of 4-6 percent for 2019-2020. Further decisions on the base rate will be made considering internal and external risks, which will determine the level of actual inflation and its compliance with the targets.