Government • 16 April, 2019

Rates of economic growth remained stable in first quarter of 2019 — Alikhan Smailov

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At the Government meeting chaired by the Prime Minister Askar Mamin, the indicators of socio-economic development and execution of the republican budget for the first quarter of 2019 were considered.

Minister of National Economy Ruslan Dalenov reported that in the first quarter of this year the economy continued to grow, some manufacturing sectors reached double-digit growth, and investment and construction increased significantly.

“In January-March, GDP growth strengthened to 3.8%. In January-February, it was 3.5%. Acceleration of growth is provided by the output of the manufacturing industry in the plus zone, as well as by accelerating growth in construction and investment,” said Dalenov.

Industrial production in January-March 2019 increased by 3.2%. In many sectors of the manufacturing industry there has been a double-digit growth. These are light industry, the production of beverages and plastic products, the production of building materials, as well as mechanical engineering, including the automotive industry.

The volume of construction work increased by 8.9%. Agriculture maintains a stable growth rate: production increased by 3.6%. Sustainability of growth remains in the service sector. During the reporting period, it increased by 3.7%. The leader of growth in the segment of services is trade. Its growth is fixed at 7.2%. In the transport sector, growth was 4.4%.

Foreign trade continues to show a positive trend. In January-February of this year it increased by 7.5% and mainly due to an increase in exports by 11.1%.

Concluding his report, the minister noted that in general, following the results of the first quarter of this year, an improvement was observed in many respects.

“For the II quarter it is important to maintain and continue the momentum. There are opportunities for this. First, the financing of the revised budget is opened. This will increase consumer and investment demand. Secondly, the period of construction, investment works, and works in the sphere of agrarian and industrial complex opens. Thirdly, small and medium business is traditionally activated in the second quarter,” said Dalenov.

Chair of the National Bank Erbolat Dossaev, in turn, reported that in March 2019, monthly inflation was 0.5%. Annual inflation remained at the level of 4.8%, which corresponds to the middle of the target corridor of 4-6% for 2019.

April 15 the National Bank decided to reduce the base rate by 9%. The current base rate level contributes to achieving the inflation targets for 2019.

The situation in the foreign exchange market is stable. The exchange rate is influenced by fundamental factors. The fluctuations of the tenge exchange rate are minor and did not require the intervention of the National Bank.

First Deputy Prime Minister – Minister of Finance Alikhan Smailov informed about the implementation of the state budget for the first quarter of 2019. In the first quarter of the current fiscal year, revenue plans at all levels of the budget were exceeded and showed a positive growth trend.

“Cost execution improved compared to the same period in 2018. State budget revenues for the reporting period amounted to 2.9 trillion tenge. Expenses were incurred for 3 trillion tenge. The state budget deficit amounted to 94 billion tenge. This is 162 billion tenge less than the plan. Cash was generated on the cash control account in the amount of 285 billion tenge,” Smailov said.

State budget revenues were exceeded by 105.6% of the plan for the reporting period, the republican budget — by 102.1%, and local budgets — by 116.6%. Revenues to the republican budget were received in the amount of 1,567 billion tenge. This is 33 billion tenge more than the plan of the reporting period and 268 billion tenge, compared with the same period last year.

Smailov also noted that as a result of the tax amnesty held for this year for SMEs, more than 34 thousand taxpayers repaid the main debt in the amount of 7.6 billion tenge (as of April 1, 2019). For them, a penalty of 1.7 billion tenge and fines of 0.2 billion tenge are subject to write-off.

The republican budget expenditures amounted to 2.7 trillion tenge. Smailov stressed that "47% of the budget funds are directed to the social sphere."

From the republican budget, regions are provided with targeted transfers for 1,112 billion tenge. In the first quarter, they were allocated 171 billion tenge, of which 165 billion tenge were executed.

Chair of Samruk-Kazyna Sovereign Wealth Fund Akhmetzhan Yessimov, akims of Akmola region Yermek Marzhikpayev, Nur-Sultan — Bakhyt Sultanov also addressed the meeting.

In conclusion, First Deputy Prime Minister – Minister of Finance Alikhan Smailov noted that in the first quarter the growth rates were stable. However, in some industries and regions, the growth trend has not reached the planned figures. Smailov noted that all indicators are reflected in the plans of all government agencies and akimats, as well as revised through the project office. He called for all central and local executions.

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