KAZAKHSTAN: Kazakhstan updates economic forecast for 2020 to respond to low oil prices, coronavirus impact

NUR-SULTAN (TCA) — As Kazakhstan is experiencing economic difficulties caused by the unstable foreign economic situation, the emerging global recession and a slowdown in business activity against the background of protective measures for containing the coronavirus outbreak, the Minister of National Economy Ruslan Dalenov on April 2 reported on the country’s updated macroeconomic forecast for 2020, primeminister.kz reports.

The minister said that since the beginning of the year, oil prices have decreased by 65.7%, for metals by an average of 15.6%, global stock indices have declined by an average of 20.9%.

With this in mind, in the updated state budget for 2020, the government has defined the average oil price for April-December 2020 at $20 per barrel. The estimated dollar rate is set at 440 tenge per dollar and annual inflation in the range of 9-11%.

The government has lowered the forecast for Kazakhstan’s oil production by 4 million tons to 86 million tons for 2020.

Dalenov said that Kazakhstan’s export will decrease by $16.3 billion to $35.1 billion and import will decrease by $7.5 billion to $26.6 billion. The country’s GDP in 2020 is expected to decline by 0.9%, he said.

In order to support the agro-industrial sector, agricultural producers will not pay land tax until the end of the year. The VAT rate was reduced from 12% to 8% for socially significant food products for the period from March 30 to October 1.

The minister said it is planned to exempt small and medium-sized businesses, for six months until October 1, 2020, from taxes and social payments from the wage fund (individual income tax, social tax, compulsory pension contributions, contributions and deductions for compulsory health insurance and social contributions).

This measure covers the sectors of tourism, catering, hotel business, large retail facilities, shopping centers, cinemas, theaters, exhibitions and sports and fitness facilities, trade entities, with the exception of the sale of food, drugstores, transportation services, consulting services and information technology sector.

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