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Kazakhstan’s construction sector overcomes credit dependence

Business Materials 2 November 2014 21:12 (UTC +04:00)

Astana, Kazakhstan, Nov. 2

By Daniyar Mukhtarov - Trend:

Kazakhstan's construction sector overcame the credit dependence, Ranking.kz. analytics service said.

"During the year, the portfolio of loans decreased by six percent," a statement says. "At the same time, the new housing commissioning volume increased by 14 percent, while investments in its construction - by 28 percent."

Kazakhstan's construction sector increased by external bank borrowings in the first half of the 2000s. From 2003 to 2008, the country's banks increased the external debt by 21 times - from $2.1 billion to $45.1 billion. The volume of loans to the construction sector increased by 13 times - from 0.1 trillion tenge to 1.3 trillion tenge for the same period. As a result, the annual volume of new housing commissioning in Kazakhstan increased from 2.1 million square meters to 6.8 million square meters from 2003 to 2008. The annual investment volume increased from 59.5 billion tenge to 468 billion tenge, a statement says.

The economic crisis destroyed the economic tandem of bankers and builders in Kazakhstan in 2008. Currently, the portfolio of loans is 1.3 trillion tenge, which is 300 billion tenge less than in August 2009. The amount of arrears in the industry for the same period increased from 264 billion tenge to 433 billion tenge, a statement says.

At the beginning of the post-crisis period, Kazakhstan's construction sector also slowed the pace. The amount of the construction companies' loan arrears has sharply increased by 41 times since 2008. This trend continued until this year. As a result of the Kazakh National Bank's interference, the delay in the sector began declining for the first time, a statement said.

"In 2013 the Kazakh construction companies managed to reach the level of 2008 in new housing commissioning - 6.8 million square meters," a statement said. "In 2013, the builders managed to beat the historical record in the investments made in housing construction - 498 billion tenge compared to 490 billion tenge in January-December 2008."

As of January-September 2014, the investment volume in housing construction in Kazakhstan reached 450 billion tenge, which is 32 percent more than in the same period of last year. The housing commissioning volume amounted to 5.1 million square meters for three quarters of 2014 or by 12 percent more than in 2013. If these rates remain until the end of the year, then there are chances that the pre-crisis record of housing commissioning in Kazakhstan in 2014 will be beaten, the statement says.

The official exchange rate is 180,87 KZT/USD.

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