Politics and Macroeconomics -- Kazakhstan Weekly News

Kazakhstan Ratings Affirmed by S&P

On 28 April Standard & Poor's affirmed its single 'B+' long term foreign currency issuer credit rating on Kazakhstan. The agency also affirmed its 'B' short term foreign currency and local currency rating on Kazakhstan. A press release by S&P says that the outlook is negative. It notes that "a more positive view on the rating depends on the extent to which the authorities continue to be able to produce adequate measures to alleviate financial pressures." (Reuters)

Prime Minister: Economic Situation is Governable in Kazakhstan

At an expanded cabinet session on Tuesday, 27 April, the Kazakhstani Prime Minister, Nurlan Balgimbaev, spoke on the first results of the switch-over to a floating exchange rate for the Tenge on 5 April. He characterised the current economic situation as "predictable, governable and, in individual areas, developing in accordance with more optimistic scenarios than expected". The Dollar has risen 1.3 times to the Tenge and consumer prices have increased by 4.4% since 5 April. However, prices did not increase in the last week of April which suggests that "the inflationary potential has been exhausted" as a result of the free float of the Tenge.

Balgimbaev summarised the economic and financial results of 1Q99. According to him, the consumer price index stood at the December 1998 level of 99.8%. Industrial output decreased to 95.9% compared with the same period of 1998. At the same time, the gross agricultural product rose by 2.1%. Investments in fixed assets stood at 93.8% in 1Q99 compared with the corresponding period last year, and freight haulage, by all means of transportation, at 82.5%.

The foreign trade turnover reduced to 80.4% in 1Q99 against the same period last year, including exports to 69.8% and imports to 90.3%. (Interfax)

Kazakhstan's GDP Falls 3.5%

Kazakhstan's GDP fell by 3.5% in 1Q99 compared with the corresponding period last year, the Deputy Finance Minister Zhannat Yertlesova told an expanded session of the Kazakhstani Government on Tuesday, 27 April. She also reported a 22.5% reduction in tax revenues in the first quarter. According to her, the total of collected taxes made up 13% of the GDP in 1Q99 compared with 16.7% of the GDP in the same period last year. (Interfax)

State Revenues Ministry to Monitor Large Corporate Tax Payers

The Kazakhstani State Revenues Ministry intends to begin computer monitoring of 98 of Kazakhstan's largest companies, the State Revenues Minister, Zeinulla Kakimzhanov, told Interfax. According to the minister, these companies produce 92% of the country's industrial output. They accounted for 33.7% of the total tax and non-tax budget revenues in 1998. However, their proportion of budget proceeds reduced to 23.9% in 1Q99. Kakimzhanov said that monitoring will provide for continuing control over economic and financial performance and payment of taxes by these companies. (Interfax)

Ban on the Import of Russian Food Remains

The joint statement of the Kazakhstani Government and the National Bank on 4 April which introduced a floating rate for the Tenge also lifted the restrictions adopted earlier on food imports from Russia, Kyrgyzstan, and Uzbekistan. However, according to reports, these restrictions remain in force in Kazakhstani regions which border Russia. In his comments on this situation, the Minister of Energy, Industry, and Trade, Mukhtar Ablyazov, said that the ban will remain in effect until 23 June. He said that following the Rouble devaluation, Russian producers have been enjoying low energy and transportation tariffs that have reduced the costs of products several times. As a result, Kazakhstani food producers have failed to compete with lower-priced goods from Russia. The minister believes that the ban will help to create fair competition between local and Russian producers in the Kazakhstani market. (Kazakhstanskaya Pravda)