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Real GDP growth projected at 2.8% in 2021 — Ministry of National Economy 

Tuesday, 25 August 2020, 09:48:59

At a government session chaired by Prime Minister Askar Mamin, Forecast of Socio-Economic Development of Kazakhstan for 2021-2025, draft laws "On the Republican Budget for 2021-2023", "On a Guaranteed Transfer from the National Fund of the Republic of Kazakhstan for 2021-2023", as well as the draft Decree of the President of the Republic of Kazakhstan "On the Allocation of a Targeted Transfer from the National Fund of the Republic of Kazakhstan for 2021’’ were considered. Minister of National Economy Ruslan Dalenov made a presentation.

The forecast of the country's socio-economic development for 2021-2025 was formed taking into account the following factors: 

  • Reporting statistics on GDP for 2019 and the results of economic development for January-July 2020;
  • Updated forecasts of international financial organizations for global economic growth. Against the background of the coronavirus pandemic in 2020, the global economy is expected to decline by 4.9% with subsequent growth to 5.4% in 2021;
  • Trends in global commodity markets. The IFI consensus forecast for oil prices for 2021-2022 is $45 and $55 per barrel, respectively. 

According to the minister, the development of the economy of Kazakhstan is positively assessed by international rating agencies. Rating agencies Moody’s and FitchRatings have affirmed the rating of Kazakhstan at the level of investment reliability.

“Of these, recently, on Aug. 21, 2020, FitchRatings has affirmed the rating at 'BBB' with a 'stable' outlook. According to FitchRatings, Kazakhstan's rating reflects the fiscal stability of the economy, effective measures to support the economy and the successful implementation of monetary policy,” Dalenov noted.

As the head of the department emphasized, depending on external and internal conditions, three possible scenarios for the development of the economy of Kazakhstan for 2021-2025 were calculated. These are the baseline, optimistic and pessimistic scenarios.

“Taking into account the conservative approach, it is proposed to use the baseline scenario as a basis for budget planning,” Dalenov said.

In the baseline scenario, real GDP growth is projected at 2.8% in 2021. In 2025, it will reach 4.6%. Nominal GDP will amount to 76.7 trillion tenge in 2021, and in 2025 — 104.8 trillion tenge. Oil production in 2021 will amount to 86 million tons with an increase in 2025 to 100.7 million tons. Positive growth is expected in all basic industries.

“The manufacturing industry will grow at a faster pace (6.7% on average per year) than the mining industry (2.9%). Average annual growth rates will be 6.2% in agriculture and 5.5% in trade. Exports of goods will amount to $41.4 billion in 2021 with an increase to $51.5 billion in 2025. Imports will increase from $36.3 billion in 2021 to $37.8 billion in 2025,” Dalenov said.

Taking into account the long-term goals of the Strategy "Kazakhstan 2050", the key priorities of social and economic policy are: 

  • Stimulating macroeconomic policy and development of the financial market;
  • Competitiveness of industries and ensuring the self-sufficiency of the economy;
  • Further improvement of the investment and business climate;
  • High quality human capital;
  • Balanced regional development;
  • Efficient public sector;
  • Proactive trade policy and export promotion.

According to Dalenov, the following forecast parameters were used in the formation of the three-year budget for 2021-2023.

  • Real GDP growth of 2.8% in 2021, 3.7% in 2022 and 4.6% in 2023. 
  • Inflation is 4-6% in 2021-2022 and 4-5% in 2023.
  • Oil production at 86 million tons in 2021, 89.6 million tons in 2022 and 100.8 million tons in 2023.
  • Oil price is set at $35 per barrel in 2021-2023, taking into account a conservative approach.

Taking into account these macroeconomic indicators, a forecast of budget parameters was developed, where the republican budget revenues (excluding transfers) will amount to 6,926 billion tenge in 2021, 8,566 billion tenge in 2022, and 9,217 billion tenge in 2023.

Dalenov informed that the guaranteed transfer is proposed to be determined in 2021 in the amount of 2,700 billion tenge, in 2022 — 2,400 billion tenge and in 2023 — 2,200 billion tenge.

“The guaranteed transfer is proposed to be used to finance social obligations. Accordingly, in order to increase funding for development programs, it is proposed to attract a targeted transfer from the National Fund in the amount of 1 trillion tenge in 2021,” the minister said.

Thus, revenues are projected to amount to 11.4 trillion tenge in 2021, 11.8 trillion tenge in 2022, and 12 trillion tenge in 2023.

The expenditures of the republican budget are projected in 2021 in the amount of 14,049 billion tenge, in 2022 — 13,873 billion tenge, in 2023 — 13,889 billion tenge.

In general, the Forecast of socio-economic development is aimed at maintaining macroeconomic stability and ensuring productive employment, as well as at sustainable and high-quality development of the national economy.

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