24 Aug 2021, 12:14
At the government session chaired by Prime Minister Askar Mamin, the forecast of socio-economic development of Kazakhstan for 2022-2026, draft laws "On the Republican Budget for 2022-2024", "On a guaranteed transfer from the National Fund of the Republic of Kazakhstan for 2022-2024", as well as a 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 2022-2024" were considered. Minister of National Economy Aset Irgaliyev, Chair of the National Bank Erbolat Dossaev, Minister of Finance Yerulan Zhamaubayev presented their reports.
The forecast of the country's socio-economic development for 2022-2026 was formed according to various scenarios for the development of the world economy and the country's economy, taking into account the following parameters:
Reporting statistics on GDP for 2020 and the results of economic development for January-July of this year;
Updated forecasts of international financial organizations on the growth of the world economy. So, in 2022, the world economy is expected to grow by 4.9%, in 2023 — by 3.5% (WB forecast);
According to the IFI consensus forecast, in 2022 oil prices will be at $ 64.5 per barrel, and in 2023 — at $58 per barrel.
Depending on the external and internal conditions, the basic, optimistic and pessimistic scenarios for the development of the economy of Kazakhstan for 2022-2026 have been developed.
Average annual GDP growth under the baseline scenario will be 4.8%, optimistic — 5% and pessimistic — 4.6%.
It is proposed to use the baseline scenario as a basis for budget planning.
“Under this scenario, real GDP growth is projected at 3.9% in 2022. In 2026, it will accelerate to 5.2%. Nominal GDP in 2022 will amount to 87.1 trillion tenge, and in 2026 — 119.9 trillion tenge. Positive growth is expected in all basic industries. Oil production in 2022 will amount to 87.9 million tons with an increase in 2026 to 107.4 million tons. Exports of goods in 2022 are projected at $ 60.1 billion and by 2026 will increase to $79.8 billion,” said Irgaliyev.
Imports of goods will increase from $40.8 billion in 2022 to $43.4 billion in 2026. The trade balance will grow from $19.3 billion to $36.4 billion.
Taking into account these macroeconomic indicators, the following forecast of budget parameters has been developed.
According to the Minister of National Economy, the revenues of the republican budget in 2022 are projected to amount to 9.2 trillion tenge, in 2023 — 9.7 trillion tenge, in 2024 — 10.4 trillion tenge. The guaranteed transfer is proposed to be determined in 2022 in the amount of 2.4 trillion tenge, in 2023 — 2.2 trillion tenge, and in 2024 — 2 trillion tenge and used to finance social obligations.
“With this in mind, a draft law on guaranteed transfers from the National Fund for 2022-2024 has been developed and is being submitted for consideration. In addition, it is proposed to attract a targeted transfer from the National Fund in the amount of 550 billion tenge in 2022, and 400 billion tenge annually in 2023-2024. The budget deficit in 2022 is projected at 3.3% of GDP with a subsequent decrease to 2.5% of GDP in 2024,” the Minister of National Economy informed.
The non-oil deficit in 2022 is projected to be 8.1% of GDP, with a subsequent decline to 6.3% of GDP in 2024.
The expenditures of the republican budget are projected in 2022 in the amount of 15.9 trillion tenge, in 2023 — 15.6 trillion tenge and in 2024 — 16 trillion tenge. With an oil price of $60 per barrel, revenues from the oil sector to the National Fund are projected to grow from 2.5 trillion tenge in 2022 to 3 trillion tenge in 2024. Taking into account the planned transfers, the foreign exchange assets of the National Fund are projected to grow from $55.3 billion in 2022 to $61.6 billion in 2024.
According to Aset Irgaliyev, in order to achieve the strategic initiatives of Elbasy, fulfill the instructions of the Head of State, implement the election program of the Nur-Otan party, as well as in accordance with national priorities, a forecast of socio-economic development for 2022-2026 has been developed.
“In order to improve the welfare of the population to ensure sustainable and high-quality growth of the economy within the framework of the medium-term economic policy, the following measures will be taken: stabilization of macroeconomic indicators, formation of a new investment cycle, balanced development of regions, diversification of the economy, improvement of the business climate, development of the digital economy, human capital and an effective system of public administration,” Irgaliyev said.
In turn, the chairman of the National Bank Erbolat Dossaev said that the recovery of the national economy continues against the background of improving external conditions, the current fiscal stimulus and the low base of the last year.
“It should be noted that further rates of development of the world economy are associated with the risks of the spread of the delta strain of coronavirus and low rates of vaccination in developing countries. Thanks to the anti-crisis initiatives of the Head of State, the economy of Kazakhstan continues to recover and for 7 months of this year. grew by 2.7%. Following the results of this year. The National Bank expects a return to the pre-crisis level with a GDP growth of up to 3.7%,” Dossaev noted.
Implementation of joint measures of the Government and the National Bank to ensure macroeconomic stability has made it possible to achieve positive changes in the Kazakhstani economy, which is confirmed by international rating agencies. Kazakhstan's sovereign rating has been upgraded by Moody's to 'Baa2' for the first time since 2006, and has also been affirmed by Fitch at 'BBB', in both cases with a stable outlook.
“Based on the above, the National Bank has updated the forecast of the main indicators of monetary policy and the balance of payments for the Forecast of socio-economic development for 2022-2026,” the head of the National Bank emphasized.
According to the National Bank's estimates, taking into account the increased external inflationary background, persisting internal imbalances on the supply side, as well as ongoing fiscal stimulus measures, inflation by the end of 2021 is expected to be in the range of 6-7%. The inflation estimate will be updated based on the results of the next forecast round in September of this year.
In accordance with the July instruction of the Head of State, together with the Government, active work is being carried out to implement a package of anti-inflationary response measures. Successful implementation of the above measures is a prerequisite for reducing inflation to 4-6% in 2022, 4-5% in 2023-2024, 3-4% in 2025-2026 in accordance with the Forecast of socio-economic development for 2022-2026 years. These targets are in line with the Monetary Policy Strategy until 2030.
As Dossaev noted, in accordance with the goals of the National Development Plan of Kazakhstan until 2025, an increase in non-resource exports and a decrease in dependence on imports will contribute during the forecast period to a reduction in the current account deficit of the balance of payments and a transition to a surplus zone up to (+)1.9 % to GDP in 2026.
“A phased increase in exports of goods to $80 billion in 2026 is expected. The growth in oil exports will be supported by an increase in oil production starting from mid-2023. Non-oil exports will grow due to a gradual recovery in global demand, the expected rise in metal prices and an increase in non-resource exports,” the head of the National Bank said.
The import of goods will be supported by the growth in the effective demand of the population and business, as well as by the implementation of large investment projects. Measures to reduce dependence on imports, implemented under the trilateral Agreement between the Government, the National Bank and the Agency of Kazakhstan for Regulation and Development of Financial Markets for 2021-2023, will contribute to a moderate increase in imports to $43.4 billion in 2026.
In accordance with the approach previously agreed by the National Bank, guaranteed transfers from the National Fund are reduced from 2.4 trillion tenge in 2022 to 2 trillion tenge in 2024.
According to the Concept for the Formation and Use of Funds of the National Fund, targeted transfers from the National Fund are allocated exclusively by the decision of the President of the Republic of Kazakhstan to finance anti-crisis programs during periods of economic downturn, socially significant projects, strategically important infrastructure projects in the absence of alternative sources of funding.
Minister of Finance Yerulan Zhamaubayev noted that the bill was developed taking into account the latest changes in budget legislation, based on the Forecast of the country's socio-economic development until 2025, and is aimed at improving the well-being of every citizen and a gradual economic recovery.
“Revenues for 2022 are projected at 13 trillion tenge, with an increase of 431 billion tenge to the plan of the current year. Non-oil revenues are provided with an increase of 1.8 trillion tenge or 25.1%. In terms of oil revenues, it is planned to decrease by 1.3 trillion tenge in connection with a gradual return to the regime of accumulating funds of the National Fund. The guaranteed transfer is determined next year at 2.4 trillion tenge with a decrease to 2 trillion tenge by 2024. As a result, the share of non-oil revenues will grow from 56.4% per year. up to 71.4% in 2024,’’ informed the Minister of Finance.
The revenues of the republican budget will amount to 9.2 trillion tenge in 2022, 9.7 trillion tenge in 2023, and 10.4 trillion tenge in 2024. The budget deficit is planned with a phased reduction from 3.3% to GDP in 2022 to 2.5% to GDP in 2024. At the same time, the non-oil deficit for the specified period will decrease from 8.1% to GDP to 6.3% to GDP.
Expenditures for the medium term are formed taking into account the national priorities of the Republic of Kazakhstan until 2025. In 2022, expenses will amount to 15.9 trillion tenge with a 577 billion tenge increase from the plan of the current year. Current budget expenditures are determined at the level of 14.9 trillion tenge for the next year. The volume of the development budget is planned in the amount of 1 trillion tenge in 2022. As Zhamaubayev emphasized, the social orientation of the budget has been preserved. The share of the social sector in the structure of expenditures is 50%. So, in 2022, 8 trillion tenge is planned for the social sphere, with an increase of 515 billion tenge in relation to the budget of the current year.
“The increase in expenses is associated with the annual indexation and an increase in the contingent of recipients of pensions and benefits, as well as an increase in the salaries of teachers and doctors. To support the development of the real sector of the economy for 2022, about 2 trillion tenge is provided. Within the framework of these funds, the implementation of the state programs Nurly Zhol, Nurly Zher, the development of the agro-industrial complex, State Program of Industrial and Innovative Development, Business Roadmap-2025 and others will be continued,’’ the Minister of Finance said.
In accordance with the instructions of the Head of State, changes in the State Planning System, as well as National Priorities, work is currently underway to transform state programs into national projects.
In 2022, 4.5 trillion tenge will be allocated to the regions at the expense of the republican budget, this is 28.3% of the total budget expenditures. Of these, 1.8 trillion tenge are provided in the form of targeted current transfers, transfers for development — 630 billion tenge.
First Deputy Prime Minister of the Republic of Kazakhstan Alikhan Smailov noted that the forecast for the development of the country's economy was formed taking into account global factors and the internal situation.
“According to the macroeconomic forecast for 2022-2026, the actual average annual growth rate of the country's gross domestic product will be 4.8%. If the gross domestic product in 2022 grows nominally by 8.4%, then the tax revenues of the republican budget will increase by 29%. This will reduce dependence on the National Fund in the medium term,” Smailov said.
As a result, the volume of transfers from the National Fund will be attracted with a decrease in 2022 by 1.6 trillion tenge, in 2023 by 350 billion tenge, in 2024 by 200 billion tenge.
According to Smailov, the draft budget is balanced and meets the national priorities and objectives set by the Nur Otan party's electoral program.
“All social obligations will be fulfilled in full. At the same time, it is necessary to use budget funds as efficiently as possible. In general, the prospects for the development of the economy of Kazakhstan in the medium term are aimed at strengthening the national economy, developing competition and maintaining social stability,” Smailov summed up.