Astana, Kazakhstan, Feb. 11
By Daniar Mukhtarov - Trend:
The devaluation of Kazakhstan's national currency will support the trade balance and improve the foreign trade positions of the country, Kazakh Minister of Economy and Budget Planning, Erbolat Dossaev said on Feb. 11.
He made the remarks speaking at a briefing held in Astana at the Central Communications Service under the Kazakh President.
"The devaluation is expected to result in the growth of domestic producers' output and reduction of imports of more expensive goods. This will keep the trade balance of Kazakhstan and will improve the foreign trade position of the country," he said.
Aside from that, given the devaluation, the nominal amount of the country's GDP will increase by an additional 6.5 percentage points. The nominal GDP growth in Kazakhstan in 2014 will stand at 119.4 percent.
He stressed that, the country's nominal GDP in 2014 will be 41.1 trillion tenges compared with 38.6 trillion tenges, predicted earlier.
"The nominal GDP growth will be facilitated by an increase in export earnings in tenge by 8.8 percentage points," Dossaev said.
Simultaneously, due to appreciation of import, Kazakhstan's nominal GDP will decline by 2.3 percentage points.
Aside from that, according to the minister, a positive impact of devaluation on revenues of the country's state budget is expected.
"According to estimates, Kazakhstan's budget revenues in 2014 will increase by 130.2 billion tenges due to exchange rate differences on receipts of export duty on oil (125.7 billion tenges), on the rents for the use of Baikonur complex (3.7 billion tenge), on the rents for the use of military firing ground (0.8 billion tenges)," he said.
At the same time the expenditures of the country's budget will increase by 85.2 billion tenges (expenses of the foreign ministry, debt service and others) due to exchange rate differences.
"Thus, the growth of budget expenditures will be levelled by growth in budget revenues," the minister said.
Dossaev added that the devaluation of the tenge by 20 percent will increase inflation by 3.3 percentage points.
"Given the inflation in 2013 at 4.8 per cent, it is expected that its rate will remain within 6 to 8 percent," he said.
At the same time, no additional growth in utility tariffs is envisaged.
The share of paid services in the inflation index will remain at the previously approved level of 1.2 percent.
Kazakhstan envisages increasing pensions in 2014 by 9 percent, outstripping the average inflation rate by 2 percent and social benefits - by 7 percent.
"Measures will be taken to curb the growth of prices for socially important goods, using stabilization funds and establishing maximum prices in order to avoid the impact of inflation on the cost of food," the minister said.
The Kazakh National Bank decided to stop maintaining the exchange rate of the national currency tenge at a previous level, to reduce the volume of foreign exchange interventions and to reduce interference with the process of formation of the tenge exchange rate, the bank said on Feb. 11.
"The National Bank expects that the new level of the exchange rate will be about 185 tenge per dollar," the bank said.
The official rate of the National Bank was at 155.5 tenge per dollar on Feb. 11.
Translated by E.A.
Edited by C.N.