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Kazakhstan Still Targets 6% GDP Growth as Tax Drop Triggers Cuts

Tuesday 14 May 2013

ASTANA (Bloomberg) – Kazakhstan reiterated its 6% economic-growth forecast for this year even as falling corporate-tax revenue prompted the government to cut spending.

Corporate taxes will fall 229.9 bln tenge ($1.5 bln) short of the previous plan, Economy and Budget Planning Minister Erbolat Dosayev told a Cabinet meeting today in Astana, according to an e-mailed copy of his speech. The budget deficit in 2013 has been raised from 2.2% to 2.5% of the country’s GDP, according to the Minister. Budget revenue will be 3.588 tln tenge, 226.1 bln tenge less than envisaged earlier, Dosayev he said, confirming a 121.3 bln-tenge reduction in spending to 6.1 tln tenge.

The European Bank for Reconstruction and Development cut Kazakhstan’s 2013 growth forecast this month to 4.9% from 6% in January. The reduction reflects weaker expansion in neighbouring Russia and delays in new energy projects, the EBRD said on its website.

Earlier Minister Dossayev had said that GDP growth in Kazakhstan would make up around 5% in the H1 2013 and reach 6% in the H2 2013. “The earlier announced inflation rate will be kept within the range of 6-8%”, the Minister said.

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