Government • 14 May, 2020

State budget received 2.7 trillion tenge of revenues in 4 months

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At the government session chaired by Prime Minister Askar Mamin, First Deputy Prime Minister – Minister of Finance Alikhan Smailov and Chair of the National Bank Erbolat Dossaev reported on the implementation of the state budget of the Republic of Kazakhstan and the state of the banking sector in January-April 2020.

As Smailov noted, based on the results of four months, the state budget received 2.7 trillion tenge of revenues. The plan is executed by 103.9%. 1.7 trillion tenge of revenues came to the republican budget.

Non-fulfillment of the tax plan amounted to 61 billion tenge. The principal amounts of default are VAT and CIT. Failure to implement the plan is still influenced by factors in foreign markets.

For the main export items, prices fell on average by 19% compared with the 4 months of 2019 and by 15% since the beginning of the year. Revenues from service sectors decreased.

Own revenues of local budgets were executed by 119.1% and amounted to 1.3 trillion tenge. In all regions, revenue plans are overfulfilled. The state budget expenditures were fulfilled by 97.7%, the republican — by 98.6%, local budgets — by 97.1%.

“The expenditures of the republican budget amounted to 4.3 trillion tenge. Not executed 62 billion tenge. Of these, savings — 14 billion tenge. 48 billion tenge have not been disbursed. The main reasons for non-development are the long and untimely conduct of competitive procedures, payment for the actually rendered volume of services, work performed, long-term execution of contracting procedures, and claim-related work,” Smailov explained.

The revised budget for anti-crisis measures additionally provides 1.1 trillion tenge. Of this amount, 70% is provided in local budgets for subsidizing and guaranteeing projects of entrepreneurs within the framework of the state program Enbek, projects Aul – El Besіgі, Business Roadmap, subsidies for the agro-industrial complex.

“All necessary budgetary procedures have been implemented. Public procurement is carried out through simplified procedures. The development of these funds will be taken under special control,” Smailov emphasized.

Chair of the National Bank Erbolat Dossaev, in turn, reported that in 2020 the situation in the global commodity and financial markets began to recover against the backdrop of large-scale fiscal and monetary incentives. Stock markets entered a positive growth zone as a number of countries in the world gradually quarantined. The stock market grew by an average of 11-12%, having won a significant March fall.

“An OPEC + agreement was reached on April 10, 2020, to reduce oil production by 9.7 million barrels per day. Initially, the OPEC + agreement did not improve the mood in the commodity market amid increasing oil reserves and fears of a deeper drop in demand for raw materials. As a result, the price of Brent crude oil fell to a minimum of $15.98 per barrel during trading on April 22, 2020. By the end of April 2020, oil quotes won back the fall and reached $25.27 per barrel,” Dossaev said.

The decline in prices and global demand for oil, as well as the introduction of an emergency and quarantine regime, affected the indicators of economic activity in Kazakhstan. According to preliminary data of the Committee on Statistics of the Ministry of National Economy, the largest decrease in 4 months 2020 was shown by such service industries as transport and trade.

Against this background, in order to maintain business activity and create more favorable conditions for lending to the economy, in early April 2020, the National Bank reduced the base rate to 9.5% from April 6, with a corridor of +/- 2 pp , and on April 27 2020, the base rate was kept at the same level.

According to the estimates of the National Bank, with the positive development of the situation on world commodity markets and the improvement of external conditions, the inflation corridor this year may be 6-8% with oil prices rising to $35-40 per barrel.

According to Dossaev, in the framework of supporting the economy, the implementation of anti-crisis measures continues.

  1. Under the Program of Concessional Lending for Priority Sectors of the Economy as of April 30, 2020, banks accepted 650 applications totaling 437.9 billion tenge. 499 projects worth 308.6 billion tenge were approved, 382 loans worth 158.3 billion tenge were issued.
  2. Under the Program of Concessional Lending to SMEs and individual entrepreneurs affected by the state of emergency, entrepreneurs filed 1,403 applications, 397 loans worth 79.1 billion tenge were issued.
  3. Under the 7-20-25 program, as of May 6, 2020, 17,430 applications for 200.2 billion tenge were approved, of which 14,812 loans worth 175.2 billion tenge were issued. Under the Baspana Hit market mortgage program, 23,184 loans worth 187.8 billion tenge were issued.

In order to expand the coverage of the 7-20-25 program, the limit on the maximum cost of purchased housing in the city of Karaganda has been increased from 15 million tenge to 20 million tenge.

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