BAKU, Azerbaijan, June 8
Trend:
First Deputy Prime Minister of the Republic of Kazakhstan Alikhan Smailov spoke about the plans to reduce the non-oil budget deficit, Trend reports referring to Kazinform news agency.
"Taking into account the current limitation on the minimum balance of the National Fund in the amount of 30 percent of the forecasted value of GDP at the end of the corresponding year, as well as the limitation on the volume of guaranteed transfers, tied to the cut-off price for oil, which will enter into 2023, the establishment of an additional limitation on the volume of transfers depending on the level of investment income of the National Fund in a given year is unreasonable," Smailov wrote in a response to the MPs request.
"The reason is that the profitability may fluctuate due to the unpredictability of financial markets and in some years it may even be negative," the first deputy prime minister said.
"The establishment of several restrictions for one parameter is not an effective measure as the established restrictions may contradict each other in the future in some periods," the first deputy prime minister added.
At the same time, the Concept of the National Fund envisages:
- the establishment of the targeted nature of the guaranteed transfer to ensure social and infrastructural development since January 1, 2021;
- strengthening of budget rules in terms of establishing restrictions on state spending to ensure the fulfillment of the savings function of the National Fund starting from 2023;
- gradual reduction of the non-oil budget deficit from 9.1 percent of GDP in 2021 to 6 percent of GDP in 2025;
- ensuring the transition to a new strategic distribution of assets of the National Fund till late 2022, which implies a transition from a conservative distribution (80 percent in bonds and 20 percent in shares) to a balanced distribution of assets (60 percent of bonds, 30 percent of shares, up to five percent of alternative instruments and up to five percent of gold).
Earlier, the first deputy prime minister answered the MPs’ request regarding the termination of the unlimited withdrawal of funds from the National Fund for current budget expenditures and the refusal from annual guaranteed transfers to the budget.
Smailov also spoke about the expected reduction in transfers from the National Fund.