Fairly good progress has been made in the elapsed year-half, PM Karim Masimov said at the enlarged session yesterday. As roughly estimated GDP increment as of the account period made 8%, macro-economic stability is saved thanks to state programs, the government’s anti-crisis measures including. Good conjuncture of export primary goods – oil, gas, grain and metals was instrumental in it too. The main focus of Kazakhstan’s economic policy, the PM stressed remains diversification of economy to bring down dependence on the primary component in it.

Industrial growth

The GDP was estimated basing on short-term economic indicator (SEI), which is calculated from real growth rate. In the accounting period the SEI went up by 8,8%, as informed by the minister for economic development and trade Zhanar Aitzhanova.

The ministry reports that the industrial production has grown in H1 by 11% versus the same last-year term. Cf. in H1 2009 the increment made 1,8%. Production augment in processing industry is 18,3% surpassing the growth rate in mining industry, where it is 6,3%.

The processing industry owes its growth to dynamically developing engineering, showing a 67,8% accretion in H1, in chemical industry it is 67,5%.

In food industry the growth made 14,6%, largely thanks to launched in H1 agro-industrial businesses tailored to the internal and CU market needs.

These are the figures cited by the first vice-minister of industry and new technologies Albert Rau: in H1 Kazakhstan’s industrial businesses have produced the goods worth the sum of around 5,5trn tenge. All the regions exceeded the last-year indices. The best-performing oblasts are Pavlodar, Kostanai, South-Kazakhstan and Almaty.

The leading branch is mining industry, whose output is worth 3,4trn tenge. From the year-start new productions have been launched in the mining-metallurgy complex the sum of 177,6bn with nearly 6 500 jobs opened thereby.

The processing productions’ output is the sum of 1,7trn tenge, uranium extraction volumes are 8 452 tons, and on the amended plan for 2010 second year-half it is to make 9 770 tons, which makes Kazakhstan a world leader in uranium extraction, A.Rau underlined.

The investment projects-to-be on the Republic and regional industrialization map will be further augmenting production growth. In H1 out of all the planned 144 projects 72 have been launched the total sum of 396bn tenge with 12 thousand jobs opened.

In H2 another 72 objects are to be finalized worth 459bn tenge. The progress reports say the disbursed investment volume makes 307bn tenge, or 67%. Best-performing oblasts in it are West-Kazakhstan-89%, North-Kazakhstan-84%.

According to the deputy-board chairman of Samruk-Kazyna NWF Arman Dunayev 53 projects of their fund worth in total $22,1bn are on the Industrialization Map.

The implemented investment projects and new launched objects helped sustain construction works. In June the construction pace rose by 0,5%, Zh.Aitzhanova stated. To address the estate market problems the accommodation construction is to be finalized through second-tier banks and buyout of the lease accommodation through the estate Fund of “Samruk-Kazyna”.

Transport area shows progress too. In the accounting time cargo carriages upped by 16,8%.

By the way fixed capital expenditures remain 4,8% lower than in 2009, but in their structure the share of the businesses’ and organizations’ own means went up to make 45%. The investment volume in agriculture in the time in question rose by 40,2%, in industry – by 27,7%, construction -by 39,8%, power supply -54,8%.

With launch of the Customs Union of Kazakhstan, Russia and Belarus from this January a single customs tariff is applied and unified measures of non-tariff regulation.

In compliance with the action plan for a single economic space formation in the six months ahead the Government is to work out and endorse the most important agreements, forming the CU SES legal framework.

Enough grain for export too

According to the MEDT leader a 3,1% production accretion in agriculture as of H1 accounts for a 3,3% growth in husbandry. The branch owes its positive characteristics to a sizeable state support, by “KazAgro” holding too. In the expired 6 months 76bn400mn tenge has gone to AIC through the holding, which helped create thousands of jobs, says Berik Beisengaliyev, deputy-board chairman of the holding.

In this year 59 investment projects worth 70bn800mn tenge are funded, 17 projects have been launched worth 25bn700mn tenge, with another 33 projects worth 28bn due in H2.

Naturally readiness for harvesting time is the uppermost concern in the agriculture ministry at present, and A.Kurishbayev – the agriculture minister said provision with fuel was a settled matter – 62 tenge per liter and guaranteed provision with it the amount of 408thousand tons.

The second task is creation of local stabilization grain funds, especially in the regions hit by the drought. Prolongation of credit repayment to these regions’ agro-producers is being tackled, the minister said. On the whole, he went on, factoring in the expected harvest yield and the carryover storage the home market demands in grain will be met with the export potential saved too. Work at cattle selection and its epizootic safety will be continued.

Zh.Aitzhanova believes the Customs Union opportunities should be tapped, with steps to stimulate agro-wares export and development of husbandry.

Small business stimulating demand

As part of anti-crisis measures the government takes steps for business climate improvement. The partner-banks have issued 2 515 loans the sum of 144,7bn tenge.

The “Roadmap for business-2020” , in effect, is suited to this end too. Work goes on for decrease of administrative hurdles to the SMSB. All the undertaken support measures helped improve their performance characteristics, raising the output volume by 61% against the same last-year term.

Inflation and dollar within the corridor

Meanwhile inflation as of the year-end is expected within 6-8%. In H1 it was marked at 4,4%, as stated by the NB deputy-chairman B.Tadjiakov. The situation in the internal currency market is described as stable and pricing conjuncture on Kazakhstan’s main export positions – as favorable.

As stated by the MEDT the world price on Brent oil is 17 dollars higher than in the 6 months of 2009 and makes $78,9 per barrel. The worth of aluminum rose by $465 to make $2 130 per ton, copper appreciated by nearly $2 000 ($7 121,5 per ton).

The country’s international reserves are $ 53,1bn, including the NB gold-currency assets - $ 26,6bn. Stability in the currency market enabled the NB to widen the band of tenge since 5 February 2010 – 150 tenge per dollar, “plus” 10%, or 15 tenge “minus” 15%, which promises tenge strengthening, -B.Tajiakov said.

Direct foreign investment made $3,3bn. RK’s gross external debt decreased in 2010 Q1 by $1bn to make $110,7bn.

The National bank’s measures in the last year in sustaining liquidity helped improve the situation in it. Restructuring of the Alliance Bank and Temirbank is under finalization.

Gains in all the regions

The figures cited by the finance minister B.Zhamishev, making the budget performance report are: in H1 the budget receipts made 2 036,7bn tenge or 93,7% to the plan, the expenditures – 2 241,3bn, or 93,4% to the plan on payments. The budget deficit is the sum of 204,5bn tenge. The clear balance of the budget means as of the accounting period makes 14,4bn tenge.

Gains against the last-year same term went up by 19,6% to make 2 034,7bn. Local budgets’ gains in the elapsed 6 months made 1 191,7bn tenge, or 101,4% at the planned 1 175,4bn. Bigger budget receipts are there in all the regions, the minister stated. The pending disbursements make 96,9bn tenge. The PM’s chided the under-performing budget programs’ administrators for it: to distract budget resources and leave them pending is unreasonable and unfair!

Fewer unemployed

The undertaken measures in fighting unemployment brought fruits too: in this year Q2 the number of the unemployed fell from 524 (in the year-start) to 504 people, and the unemployment rate – to 5,8%, as stated by the labor and social protection minister Gulshara Abdikalikova.

In 2010 H1 over 140 thousand new jobs opened, nearly half of which (68 thousand) – in rural districts and about 40 thousand in small business.

In the regions the saved means were re-channeled to the projects in rural districts – 37 new projects were launched there.

From 1 April the budget employees had a 25% wage rise, social expenditures were raised by over 19,8% to make 20% of overall budget expenses, or 5% of the country’s GDP. Disability benefits and compensations in loss of a breadwinner went up, pension payments were raised by 25%; one-time payments in birth of a fourth and more children have more than doubled (2,5 times against the year 2007). Monthly benefits for babysitting have grown, and payments to parents and custodians looking after disable children (the size of one minimal wage -14 952 tenge).

Optimism inspired by teamwork

Summing up the performance reports the PM said the H1 characteristics inspired optimism, but there are another 6 months of the year ahead. In mid-August targets for it and possibly the 2010 budget will be specified.

We have our hands full: the OSCE summit, Aziada, the AIID program, the roadmap for business-2020, education, healthcare, employment and languages development programs.

To the media he described the government as a united team, who, for all the shortcomings are doing a good job, of which the results are suggestive.

Dmitry Popazov

Photo: Victor Fedyunin