BAKU, Azerbaijan, May 12
By Nargiz Sadikhova - Trend:
Lower prices and global oil demand, as well as the introduction of an emergency and quarantine regime have affected economic activity in Kazakhstan, Governor of Kazakhstan’s National Bank Erbolat Dossaev said, Trend reports with reference to the press office of Kazakhstan’s prime minster.
Dossaev said that the situation on global commodity and financial markets started recovering amid large-scale fiscal and monetary incentives. Stock markets display positive growth as a number of countries in the world are gradually lifting quarantine. The stock market grew by an average of 11-12 percent, having made for 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 situation at the commodity market amid increasing oil reserves and fears of a deeper fall in demand for raw materials. As a result, the price of Brent crude oil fell to a minimum of $15.98 per barrel during the trading session on April 22 of this year, however by the end of April the price $25.27 per barrel once again,” Dossaev said.
The preliminary data of Kazakhstan’s Committee on Statistics said that the greatest decrease over the course of four months this year was observed in transport and trade.
Taking all of this into consideration in order to maintain business activity and create more favorable conditions for lending to the economy, the National Bank reduced the base rate to 9.5 percent for the period from April 6, with a corridor of plus/minus 2 percent points, and on April 27 made the decision to keep the same base rate.
The National Bank’s estimates said that in the case of the positive scenario development on world commodity markets and the improvement of external conditions, the inflation corridor this year may reach 6-8 percent with oil prices rising to $35-40 per barrel.
Dossaev also noted that anti-crisis measures continue being implemented in order to support country’s economy:
- Country’s second tier banks accepted 650 applications for a total of 437.9 billion tenge ($1.04 billion) under the concessional lending for priority economy sectors program. Some 499 projects worth 308.6 billion tenge ($733.1 million) were approved, 382 loans worth 158.3 billion tenge ($376.08 million) were issued.
- Entrepreneurs filed 1,403 applications under the preferential lending program to SMEs and individual entrepreneurs affected by COVID-19 pandemic, and 397 loans worth 79.1 billion tenge ($187.9 million) were already issued.
- Some 17,430 applications for 200.2 billion tenge ($475.6 million) were approved as of May 6, 2020 under the 7-20-25 housing program, including 14,812 loans worth 175.2 billion tenge ($416.2 million) which were issued already. In turn, 23,184 loans worth 187.8 billion tenge ($446.1 million) were issued under the Baspana Hit mortgage lending program.
Dossaev added that in order to expand coverage of the 7-20-25 program, the limit for maximum cost of the housing being purchased was increased from 15 million tenge to 20 million tenge ($35,636 to $47,514) in Karaganda city.
