OREANDA-NEWS. August 18, 2009. As of June 2009, Kazakhstan’s national economy grew 1.4% on June 2009. This was announced by Bakhyt Sultanov, Economy Minister, at a government's sitting.

Since the start of the crisis Kazakhstan has seen no technical recession. The economy shrank only in the Q1, while in Q2 Kazakhstan posted a growth of 3%. “Thus, we can assert that the national economy hit the bottom in the H1 and is now at the stage of recovery”, B. Sultanov believes.

According to the Minister, industrial production decline was followed by a growth of 7% in June on the same month of 2008. Positive trends can be seen in agriculture.

As of July 13, implementation of the Road Map, a project of industrial development in country regions, has created 238.7 thousand jobs.

The Minister outlined the task of ensuring 1.8-2% growth in Q3 and Q4 on the same periods of 2008 so that to secure a positive economy growth rate by the end of the year.

“As of July 1 the banking sector’s debt stood at USD 32 billion, while as of the end of 2008 the figure made up over USD 46 billion; for the recent seven quarters the debt figure has reduced 1.5-fold”, reported Gregoriy Marchenko, Head of the Kazakhstan’s Central Bank.

Head of the National Bank also informed that BTA and Allaince account for 40% of the banking sector’s external debt. “When the restructuring plans are accomplished, the problem of the external debt will be solved”, Mr. Marchenko said.

Besides, he informed that the Financial Sector Development Concept being elaborated under instructions of the President envisages an external borrowing ceiling of 30% of the overall liabilities for every second tier banks.

Despite inflationary expectations, annual inflation as of the end of July made up 6.9%, 1.5-fold down against December 2008 and 3-fold down on July 2008. “The level reached is the lowest since February 2005, which means that we returmed to the pre-crisis level”, Mr. Marchenko said.
Budget revenues for the H1 made up KZT 1 trillion 701 billion (95% of the planned level), informed Bolat Zhamishev, Finance Minister.

Kazakhstan’s Prime Minister Karim Massimov instructed the Government to draft recommendations on how to attract financial resources of foreign companies operating in Kazakhstan to local banks. The Prime Minister emphasized that apart from growing local content in major projects, foreign companies should be required to keep a certain amount of financial resources with domestic banks. The Agency for Financial Supervision and the National Bank have been commissioned with drafting respective recommendations. Kazakhstan’s representatives in Boards of foreign companies operating in Kazakhstan are also expected to contribute to the efforts. Karim Massimov commissioned Vice Prime Minister Serik Akhmetov with supervising the efforts. “Within a month, recommendations should be complete and submitted for the Government’s consideration”.

Prime Minister noted that through concerted efforts of all the public bodies, the pessimistic scenario suggested by some analysts earlier this year did not prove true. “Moreover, in March and Aril we saw a turning point in the economy. In Q2 the economy displayed growth against the Q1. However, we need to mobilize all the resources available to move on further”, Head of the Government emphasized.

According to him, the devaluation model implemented by the National Bank in February was very effective. “Had there been no such decisive measures, there would be no industrial production growth now”, Karim Massimov stressed.

Kairat Kelimbetov, Head of the Samruk-Kazyna National Welfare Fund, reported on the Fund’s achievements in the H1. “The Fund was able to mobilize the vast potential of the national companies…thus, KazMunaGaz National O&G Company owns two refineries and now holds a 58% stake in Pavlodar refinery. Besides, the Company now co-owns MangistauMunaiGaz and Kazakhstan Pipeline Ventures (which a shareholder in the CPC). In the H1 Kazakhtelecom expanded its capacities by 9%. The number of mobile communications subscribers with the company’s subsidiaries grew two-fold to reach 1.8 million.

Kairat Kelimbetov also informed that through support of the Fund [to struggling construction companies] 21 residential sites [with a total of 4538 apartments] were completed in Almaty and Astana. More measures are planned to ensure completion of the other troubled construction sites.