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KAZAGROFINANCE TO RECEIVE ISLAMIC LOANS FOR FARM LEASING OPERATIONS 25/05/2010KazAgroFinance - the subsidiary of the state-run KazAgro holding company - has found financing to the tune of $30 million for purchase of equipment to lease to farmers thanks to the Islamic Development Bank (IsDB).
Read More... KAZAKHSTAN GROWTH FORUM – DETAILS ANNOUNCED 26/05/2010The 5th Annual International Kazakhstan Growth Forum – the largest business forum on Kazakhstan in Europe - takes place in London (Renaissance Chancery Court Hotel) on June 15th-17th.
Read More...KAZATOMEXPO 2010: A KEY EVENT 19/05/2010The 1st Kazakhstan International Forum on Nuclear Power and Industry - KazAtomExpo 2010 – opens today in Astana. The three day event looks set to be a key annual event in Central Asia. The forum combines an exhibition and a conference – bringing together leading enterprises and specialists of the nuclear industry, power engineering and allied sectors.
The main event is the exhibition which presents the latest developments in nuclear power and industry. Apart from nuclear giants such as KazAtomProm NAC JSC and GKAE RosAtom, other exhibitors include leading Kazakh, Russian and foreign nuclear companies and partners, plus suppliers of equipment, goods and services.
Read moreGDP GROWTH UP 7.6% 11/05/2010According to preliminary data, Kazakhstan's GDP growth has risen 7.6% in the current quarter. The announcement was made by Prime Minister Massimov: "The light at the end of the tunnel is clearly visible." GRAIN EXPORTS REACH 4.8 MILLION TONS 03/03/2010To date, Kazakhstan has exported 4.8 million tons of grain from the 2009 harvest. This figure represents an increase of 1 million tons compared to the previous year’s export volume, said Akylbek Kurishbaev, Minister of Agriculture on March 2nd.
Read More... KAZAKHSTAN TO BE NO.1 PRODUCER OF URANIUM THIS YEAR 16/12/2009KAZATOMPROM ANNOUNCES RECORD RESULTS
Total uranium production in the Republic of Kazakhstan for the first nine months of 2009 amounted to 9,535 tU. The year’s target was exceeded by 3%. The increase, as compared to the corresponding period of 2008, made up 61%, while a gain of U3O8 (triuranium octoxide - a compound of uranium) output in comparison with the corresponding period of 2008 was 50%.
Read More...KAZAKHSTAN’S LEADING FOREIGN INVESTORS IN ASTANA 04/12/2009The 22nd Plenary Session of the Foreign Investors’ Council chaired by the President of the Republic of Kazakhstan took place in Astana last Friday...
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KAZAKHSTAN’S ECONOMY TURNS UPWARDS 04/12/2009 Financial experts give Kazakhstan a favorable assessment in crisis management – The development of the crude oil industry and the successful implementation of stimulating measures had a positive impact on the economy...
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FOREIGN INVESTORS’ COUNCIL MEETS IN ASTANA NEXT FRIDAY 27/11/2009The Foreign Investors’ Council (FIC) takes place on December 4th, 2009 in Astana’s Palace of Independence under the chairmanship of the President of Kazakhstan, Nursultan Nazarbayev.
Read More...1ST PREPARATORY CONFERENCE OF OSCE ECONOMIC & ENVIRONMENTAL FORUM 13/10/2009The First Preparatory Conference of the 18th Economic & Environmental Forum of the Organization for Security & Co-operation in Europe continues today (13th October) in Astana.
Read More...18th OSCE Economic & Environmental Forum 09/10/2009On October, 12 -13th, 2009, Astana will host the First Preparative Conference for the 18th OSCE Economic & Environmental Forum. The theme is: ‘Promoting good governance at border crossings, improving the security of land transportation and facilitating international transport by road and rail in the OSCE region’. The event is jointly organized by the Office of the Coordinator of OSCE Economic & Environmental Activities and the Government of the Republic of Kazakhstan.
Keynote speakers will include Kazakh Deputy Foreign Minister, the Deputy Minister of Transport & Communications; the Coordinator of OSCE Economic & Environmental Activities and the Chairman of the Customs Committee of Kazakhstan. 150 Customs, Border Guard and Ministry of Transport officials as well as international experts from across the OSCE region will attend this First Preparative Conference.
ESTIMATE OIL PRODUCTION OUTPUT FOR 2009 06/10/2009This year Kazakhstan expects oil production output to increase by five million tons against 2008. The announcement was made by the country’s Vice Minister of Energy & Mineral Resources Lyazzat Kiinov at the opening of the KIOGE-2009 International Oil & Gas Exhibition in Almaty.
Read More...RECORD GRAIN HARVEST 06/10/2009Kazakhstan has reported a record grain harvest this year. 21 million tons were collected - overtaking the previous record of 20.1 million tons set in 2007, said Kazakhstan’s President, Nursultan Nazarbayev.
Read More...PRESIDENT TO ATTEND INAUGURATION OF TURKMENISTAN-CHINA PIPELINE 21/08/2009In the course of a telephone conversation held last Thursday (13.08), the President of Turkmenistan, Gurbanguly Berdimuhamedov, invited President Nazarbayev to participate in the inauguration of the transnational gas pipeline Turkmenistan-Uzbekistan-Kazakhstan-China. The completion of the construction of this pipeline is expected in mid-December this year.
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Economy
Economic OverviewEconomic indicators paint a bright picture of Kazakhstan’s future. With a GDP growth rate around 10 % since 2000 the country is among the fastest growing economies of the world and outpaces all other Central Asian states by far. In the first eight months of 2007 the GDP has grown by 10,2 % : Kazakhstan continues the trend of two digit growth rates.
Foreign trade turnover shows a similar evolution. It has been rising over the past 10 years at an annual average growth rate of 19,1 % (highest rate for the 1995-2006 period worldwide) to reach 50 168,3 million USD by the end of August 2007. Thanks to high oil and gas prices as well as an increase oil export volumes, the country will again reach a positive balance of trade in 2007. Russia is still one of Kazakhstan's main trading partners and its major source of imports. The bulk of Kazakh exports to the West consist of raw materials, particularly oil and metals.
Its dynamic growth makes the Kazakh economy attractive for foreign investors. Foreign direct investments into Kazakhstan account for about 80 % of all capital inflows into the Central Asian economies, with EU countries being the most important source of investments. The highly developed banking system, stable institutions and investment-friendly government policies further encourage foreign investment.
| Key economic indicators
|
2003
|
2004
|
2005
|
2006
|
2007
|
2008
|
| Real GDP growth (%)
|
9.3
|
9.6
|
9.7
|
10.7
|
8.9
|
3.1
|
| Consumer price inflation (av. %)
|
6.8
|
6.7
|
7.5
|
8.4
|
10.8
|
9.5
|
| Exchange rate Tenge:US$ (av)
|
149.58
|
136.00
|
132.88
|
126.09
|
122.60
|
122.55
|
| Exchange rate Tenge:€(av)
|
168.79
|
169.04
|
165.42
|
158.27
|
167.8
|
167.75
|
| Budget balance (% of GDP)
|
-
|
-
|
-
|
-
|
-1.7
|
-1.9
|
|
|
|
|
|
|
|
|
| SOURCES: Kazakh Statistical Agency, Investor's Guide, Nationalbank Kazakhstan
|
|
|
|
|
|
|
| Main destinations of exports 2007
|
% of total
|
Main origins of imports 2008
|
% of total
|
| Russia
|
9.8
|
Russia
|
35.5
|
| Italy
|
16.3
|
EU
|
24.5
|
| France
|
8.3
|
China
|
10.7
|
| Switzerland
|
15.7
|
US
|
5.1
|
| China
|
11.8
|
Ukraine
|
4.7
|
| Others
|
38.1
|
|
|
|
|
|
|
|
| SOURCES: Kazakh Statistical Agency, Investor's Guide, Nationalbank Kazakhstan |
|
|
|
Transition to market economyToday’s economic situation is the result of a 17 year-long transition period from a former Soviet economy to a free market economy. Since independence from the Soviet Union in 1991, Kazakhstan has implemented a wide range of social, economic and political reforms. After a period of economic decline and high inflation in the 1990ies, the reforms now show their results. Priorities of current economic policy are the diversification of the economy, namely the strengthening of the non-oil industries to reduce the country's dependence on natural resources.
Because of its strong macroeconomic performance, Kazakhstan became the first former Soviet republic to repay all its debts to the International Monetary Fund (IMF) in 2000, seven years ahead of schedule. In March 2002, the U.S. Department of Commerce graduated Kazakhstan to market economy status under U.S. trade law. The change in status recognized substantive market economy reforms in the areas of currency convertibility, wage rate determination, openness to foreign investment, and government control over the means of production and allocation of resources. In September 2002 Kazakhstan became the first country in the CIS to receive an investment-grade credit rating from the major international credit rating agency Moody's.
Between 2005 – 2007, 18 Kazakh companies (4 companies on main market + 10 AIM companies, operation not incorporation, + 2 companies Debt Securities) were listed on the London Stock Exchange. Kazakhstan was the first CIS country to be granted market economy status by the EU in 2001 and USA in 2002, and to be moved to investment grade status by Moody’s in 2002.
Ratings as of 5 August 2008: (LTFC/LTDC/Outlook): Moody’s Baa2Baa1/Stable; Standard & Poor’s BBB-/BBB/Negative; Fitch BBB/BBB+/Negative. In January 2005 the Organisation for Economic Cooperation and Development (OECD) upgraded Kazakhstan’s country export risk rating, moving it from the 5th to the 4th group of risks. National ProductionKazakhstan is rich in oil and minerals. Production of oil including gas condensate reached 70.6 million tons in 2008, net oil exports accounted for 62.8 million tons. Kazakh gas production in 2008 reached 33.5 billion cubic meters, net gas exports accounted 5.6 billion cubic meters. Kazakhstan holds about 32.5 billion barrels of proven recoverable oil reserves and 3 trillion cubic meters of gas.
Industry analysts believe that a planned increase in oil production and the development of new oil fields will enable Kazakhstan to produce as much as 3 million barrels (477,000 m³) per day by 2015, lifting the country into the ranks of the world's top 10 oil-producing nations. Major oil and gas fields and their recoverable oil reserves are Tengiz with 7 billion barrels (1.1 km³); Karachaganak with 8 billion barrels (1.3 km³) and 1,350 km³ of natural gas; and Kashagan with 7 to 9 billion barrels (1.1 to 1.4 km³).
Kazakhstan has an abundant supply of accessible mineral and fossil fuel resources. Development of petroleum, natural gas, and mineral extraction has attracted most of the $40 billion foreign investment in Kazakhstan since 1993 and accounts for some 57% of the nation's industrial output (approximately 13% of GDP). According to estimates, Kazakhstan has the second largest uranium, chromium, lead, and zinc reserves, the third largest manganese reserves, the fifth largest copper reserves, and ranks in the top ten for coal, iron, and gold. Kazakhstan also exports diamonds.
Agriculture accounted for 5.9 billion US$ of Kazakhstan's GDP in 2007. Grain (Kazakhstan is the sixth-largest producer in the world) and livestock are the most important agricultural commodities. Around 74% of the country's territory is suitable for agricultural production, 20% of the labour force works in the agricultural sector. Traditionnally, stockbreeding is the dominant agricultural activity. Chief livestock products are dairy products, leather, meat, and wool. The country's major crops include wheat, barley, cotton, and rice. Wheat exports, a major source of hard currency, rank among the leading commodities in Kazakhstan's export trade. By November 2008 Kazakhstan exported around 4.7 mln. tons of wheat. Other agricultural products include fruit and wine. Kazakh agriculture still has many environmental problems from mismanagement during its years in the Soviet Union.
| Major exports 2007
|
% of total
|
Major imports 2007
|
% of total
|
| Mineral products
|
69.8
|
Mineral products
|
12.8
|
| Chemicals, plastics, rubber
|
4.1
|
Chemicals, plastics, rubber
|
10.7
|
| Non precious materials, its products
|
17.3
|
Non precious materials, its products
|
13.5
|
| Machinery, equipment transport, instruments and apparatus
|
1.8
|
Machinery, equipment transport, instruments and apparatus
|
46.8
|
| Foodstuff
|
3.9
|
Foodstuff
|
6.8
|
| Others
|
3.1
|
Others
|
9.4
|
|
|
|
|
|
| SOURCES: Ministry of Energetic and Mineral Resources, Investor's Guide, Ministry of Agriculture of the Republic of Kazakhstan
|
|
|
|
Other key facts- Industrial Production Growth: (2005) 4.6%; (2006) 7% (2007) 4.5%; (Jan-Sept 2008) 3%
- GDP per capita: (2005) US$ 3771.3; (2006) US$ 5291.6; (2007) 6814 US$; (2008) 8132US$
- Nominal GDP : (2005) US$ 57bn (2006) US$ 81bn
- Inflation Rate: (2005) 7.5%; (2006) 8.4%
- Unemployment Rate: (2005) 8.2%; (2006) 7.8% (2007) 7.3%
- Capital Investment Growth: (2005) 22.1% (2006) 10.6% (2007) 13.5%; (2008) 4.6%
- Foreign Direct Investments: (1993-2007) US$ 51.2bn, of which US$ 6.5bn in 2006 (1993-2008) US$ 72.3bn
- Internal Investments: over US$ 80bn
- Hard currency reserves: (2007) US$ 37.4bn, including National Oil Fund – US$ 15.9bn (17% of GDP)
- Natural Resources: The world’s largest reserves of barite, lead, tungsten and uranium; second largest reserves of chromites, silver and zinc; third largest of managanese; significant deposits of copper, gold and iron ore; world class oil and gas reserves.
SOURCES: Ministry of Industry and Trade of the Republic of Kazakhstan, Nationalbank Kazakhstan, Zakon
Regional Financial Center of Almaty 06/11/2007A major new financial centre will soon emerge in Asia – in Almaty, Kazakhstan... The Regional Financial Centre of Almaty (RFCA) will act as a financial hub, attracting international investment funds as well as listed companies. The RFCA is a logical step to further diversify the Kazakh economy and decrease dependence on natural resources. The Kazakh government expects the Centre to boost the internal stock market and contribute to reforms of the economy’s real sector.
The creation of the RFCA was first mooted in the mid of 1990s but it was in 2003-2004 that President Nazarbayev formally proposed the project to Kazakhstan’s financiers. The RFCA was thus created in February 2006, as part of an initiative by the government to create a stock market operating to international standards of market regulation and best practice.
Experts and consultancies were invited to contribute to its foundation, including Boston Consulting Group (BCG) - experienced in establishing financial centres, and James Wolfensohn, ex-president of the World Bank. Three models – Dublin, Dubai and Singapore – were chosen as exemplars: the RFCA has absorbed their common features – namely, Accessibility, Transparency, Reliability, Incentives and State Support for all participants.
Experts with BCG believe that bonds issued at the RFCA will amount to USD 5 billion per annum by the third year of the Centre’s existence - and rise to USD 8 billion per annum in its fifth year. This volume will be constituted by Kazakh companies and issuers from Russia and Ukraine. After five years, the RFCA will accommodate issues of companies from other Central Asian countries.
To ensure a competitive centre, the Kazakh Government has introduced a number of unprecedented measures: a highly favourable tax regime and a special body under the direction of Kazakhstan’s President to register and administrate players. The RFCA will be a special zone with unique legal governance. A major principle will be to provide equal conditions for both Kazakhstan and foreign participants.
The laws governing the RFCA - along with secondary legislation - were adopted in June 2006. A special financial court has been set-up to ensure legal protection and a standing International Advisory Council will be formed.
The RFCA’s ultimate goals include development of the securities market, integration of the internal securities market with international capital markets, attraction of domestic and foreign investments into the Kazakh economy and entry onto foreign securities markets for Kazakh capital.
The package of mid-term measures will include…
- running of IPOs of national companies and banking institutions on the trading floor
- introduction of new financial instruments such as index funds (ETFs), securitised
assets (SPVs), futures, options, instruments of Islamic banking (Sukuk etc.) which will
be accessible to institutional investors and individuals and ensure effective
development of the Kazakh securities market;
- creation of a new technology-intensive infrastructure in line with other international
securities markets;
- involvement of the Bank for Kazakhstan Development into all RFCA activities
- annual issuance of treasury notes by the Finance Ministry;
- establishment of a Kazakh clearing house;
- optimum utilisation of internal investment opportunities through involvement of internal
investors looking for long-term investments
- implementation of large-scale investment projects to upgrade living standards, through
Government project-related bonds
- provision of tax incentives in cases of insuring against risks
- permission to the accumulation pension funds to establish associated organisations to
be registered as participants of the centre’s operations.
The RFCA plans to establish ties with 17 stock exchanges, including New York, Tokyo, Switzerland, Shanghai, Moscow Interbank FX and the Kazakh Stock Exchange (KASE). In late 2006, the RFCA signed a cooperation agreement with the London Stock Exchange, an MoU with Deutsche Borse and the Stock Exchanges of Seoul and Singapore.
Almaty was Kazakhstan’s capital city until 1998; it is home to 29 of the 34 banks operating in Kazakhstan, 28 of the 39 insurance companies, 12 out of 14 accumulation pension funds. Almaty accounts for 80% of allocated loans and over half of the country’s deposits. As of today, the city provides 1/5th of the national GDP, boasts 70% of all banking transactions, 20% of all tax proceeds into the central budget, over 50% of wholesale and retail transactions, 1/5th of the foreign trade turnover, 14% of all new housing commissioned, 18% of all investments as well as 1/3rd of all goods and services produced by small and medium-sized businesses. In 2007 Fitch has assigned bb+/Stable rating to the city.
YOU WILL FIND HERE KAZAKHSTAN'S MAIN ECONOMIC FIGURES AND ANALYSIS. PLEASE CLICK HERE FOR DETAILS.
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