Politics and Macroeconomics -- Kazakhstan Weekly News

Inflation in Kazakhstan in April

Kazakhstan's monthly inflation index reached 4.6% in April compared with 0.2% deflation in March, the National Statistic Agency reported. The prices of food products increased by 5.7%, non-food products by 6.5%, and services became more expensive by 6.6%. Inflation, since the start of the year, totalled 5.1%. (IRBIS)

In the opinion of the Finance Minister, Uraz Dzhandosov, inflation reached its peak triggered by the liberalisation of the Tenge on 5 April. In subsequent months the inflation rate is expected to decrease. Inflation at the year end is expected to be 9.8% which is in line with planned budget indicators. (Interfax)

Kazakhstan's Pension Deposits Grow

According to the General Director of the State Pension Payments Centre (SPPC), Fuat Nasyrov, pension deposits in Kazakhstan grew by KZT 6.7bn in the first four months of 1998. Altogether, since the beginning of pension reform in Kazakhstan in January 1998 and the development of Kazakhstan's cumulative pension funds, the latter have collected a total of KZT 29bn (over USD 250m). Pension deposits have been formed from compulsory pension contributions from employees either to the State Pension Fund or to private pension funds (currently thirteen). The monthly pension contribution is 10% of wages and salaries. The SPPC pays current pensions and keeps records of the compulsory pension transfers to the pension funds. (Interfax)

Key Financial Indicators Updated

At the end of April 1999, Kazakhstan's gross gold and foreign exchange reserves totalled USD 1.603bn, up by USD 5m on the month and down by USD 285m on the year. This information was released by the Finance Minister, Uraz Dzhandosov, at a press conference on Wednesday, 5 May. He said also that the country's monetary gold increased in April by USD 26m to USD 503m. At the same time, the National Bank's gross foreign currency assets fell by USD 21m to USD 1,100m. The country's net international reserves totalled USD 1.010bn in April against USD 1.005bn in March.

According to the minister, in 1Q99, Kazakhstan had a balance of payments deficit of USD 242m and GDP fell by 3.5%. However, the decline in GDP is expected to reduce in subsequent quarters and be 1.5% at the year end. (Interfax)

Kazakhstan to Receive Loans from the World Bank

As reported by the World Bank's (WB) representative office in Almaty, the Bank has approved USD 470m in loans to Kazakhstan in 1999. According to the WB forecast, USD 355m of this total will be disbursed. (In 1998 the WB approved USD 315m in loans to Kazakhstan of which USD 210m were disbursed.) These loans are earmarked to support economic growth in Kazakhstan with a leading role for the private sector. They will, in particular, help to improve the country's legal and institutional bases. In early April, the WB approved a USD 42.5m loan for Kazakhstan in support of a health care project. In the near future, other loans will be provided for a legal reform project and water supply projects to be implemented in several Kazakhstani towns. The WB also noted that its loan programme for Kazakhstan in 1999-2001 provides for an increased proportion of investment loans. Between 1993-1998, investment loans made up 29% of the total borrowing. (Interfax)

… and Grants from USAID

The U.S. Agency for International Development (USAID) will allocate USD 25m under a 5-year environmental programme for Kazakhstan, Interfax reported. The grants will be of three types: one-year USD 50,000 partner grants, two-year USD 250,000 grants, and quick response grants of up to USD 5,000. A tender for these partner grants will start on 24 May. Environmental projects for the tender may be presented by Kazakhstani companies and joint ventures with a Kazakh party interest exceeding 50%. Companies engaged in medium-sized and small businesses will be favoured. Local state authorities which deal with environmental issues may also participate in the tender. (Interfax)

President Nazarbaev Speaks on Policy Priorities

In an exclusive interview with RFE/RL's Astana bureau on 4 May, President Nursultan Nazarbaev outlined his vision for Kazakhstan's domestic political development and relations with two of the country's neighbours, Russia and China. Speaking on the economic situation, he said that the world economic crisis has not spared Kazakhstan, but in his opinion, the country had overcome the crisis's adverse effects more easily and more smoothly than neighbouring states. He noted that today, all the main decisions, including state budget allocations and new legislation, are based on the long-term economic and social development programme, Kazakhstan 2030, which was adopted in late 1997. Nazarbaev stressed that Kazakhstan must develop its industrial base and encourage the growth of small and medium-sized businesses, rather than rely exclusively on the export of oil or other mineral resources.

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