OREANDA-NEWS. January 22, 2009. In 2008 the global financial crisis has significantly slowed down the world economic growth. There is a recession in a number of countries, reported the Official website http://en.government.kz.

Instability in the global financial and commodity markets has affected the rates of economic growth of Kazakhstan. According to preliminary estimates, the growth of economy in 2008 was 3.1 %, the unemployment rate - about 7 %, inflation by the end of the year – 9.5 %.

In 2009-2010 the situation in the world markets most likely will exacerbate, and this can cause negative implications for the domestic economy. It is possible that low prices for basic export positions of Kazakhstan will be kept in the global commodity markets.

Under these circumstances in 2009 the economic policy will be aimed at mitigating the implications of the global crisis on a social and economic situation in Kazakhstan.

The main objectives of the policy of the Government and the National Bank will be maintaining social stability and keeping the macroeconomic balance, as well as stimulating economic growth and business activity.

In 2009 the real GDP growth is expected to be around 2 %, the unemployment rate will not exceed 8 %. Inflation by the end of 2009 is forecasted at a level of 9 %.

One of the main tools of achieving the specified goals will be an implementation of the Joint Action Plan on stabilization of economy and financial system for 2009 - 2010 (hereinafter - Joint Action Plan) adopted by the Government, the National Bank and Agency of the Republic of Kazakhstan on regulation and supervision of financial market and financial organizations (hereinafter - FSA).

The Joint Action Plan addresses the following objectives: financial sector stabilization, support to small and medium-sized enterprises (SME), development of agricultural sector and real estate market, further economic diversification, employment maintenance and support to socially vulnerable groups of the population.

The Government, the National Bank and the FSA will ensure a stable functioning of domestic financial system and create necessary conditions for reviving credit flow to the real sector of economy.

The Government will provide additional capitalization to leading commercial banks of the system-wide importance. For individual banks stabilizing measures of the Government will also include implementation of memorandums signed with these banks.

To achieve the set level of inflation and maintain stability of the financial system, the National Bank will execute the balanced monetary policy.

To regulate and maintain the short-term liquidity at an adequate level, the National Bank will provide refinancing loans to banks, and consider the possibility of further expanding the list of instruments accepted as collateral on REPO operations, offering non-collateral loans to banks, and depositing the National Bank funds in commercial banks.

The National Bank will develop and introduce the system of guaranteeing the liabilities of banks before different creditors. It will facilitate redistribution of resources using interbank market and expand the access to operations in the money market of short-term instruments.

The amount of short-term liquidity and guarantees on the interbank liabilities provided by the National Bank will not exceed 50% of the own capital of a commercial bank.

FSA, in its turn, will strengthen the regulation of domestic financial sector. Current approaches to an estimation of capital sufficiency of financial organizations will be improved. The procedures of formation of special provisions for troubled assets will be toughened in accordance with international financial reporting standards; requirements to risk-management in the financial organizations will be improved.

FSA will work over new mechanisms of pension system functioning considering principles of shareholder’s increased responsibility and depositor’s protection.

The National Bank and the Government will constantly monitor the balance of payments and the exchange rate of Tenge to prevent the worsening of financial stability indicators under conditions when a significant share of assets and liabilities of the national economy is in foreign currency and there is a high credit risk caused by discrepancy of the currency of assets and liabilities of borrowers.

Given that, the activities of the National Bank will be aimed at maintaining the stability of the national currency or making a smooth change of Tenge’s exchange rate against foreign currencies within manageable limits.

In general, the Government activity will be focused on recovering the economy and ensuring the sustainable economic growth.

Alongside with implementation of stabilizing measures, the foundation for perspective development will be formed through maintaining a favorable investment climate, promoting competition and implementing potentially export-oriented sector projects.

The Government will launch large scale infrastructure projects, intensively develop agricultural sector and accelerate “30 corporate leaders of Kazakhstan” program execution.

Measures on stimulation of economic activity will be focused on formation of favorable conditions for development of SME sector, including the further reduction of administrative barriers. To support the domestic enterprises, the Government will provide them an access to public procurements of state bodies, state-owned holdings and national companies.

To stabilize the real estate market, the Government will continue to protect the rights of participatory residential construction beneficiaries and launch the special mortgage program in 2009.

In 2009 the main priorities in the Government activity will be ensuring employment and rendering support to socially vulnerable groups of population.

The Government in cooperation with local authorities will provide an employment for the workers temporarily unemployed as a result of production decreases, as agreed within the framework of memorandums of cooperation signed with large enterprises, and organize the vocational training and retraining of unemployed people.

The wide range of additional measures on job creation will include engaging people in public works, construction of infrastructural and social objects, as well as strengthening the control over illegal labor migration.

All social liabilities, including those stated in the instructions of the President on increase of social allowances, pensions and wages to public employees, envisioned in the republican budget for 2009-2011, will be fully and timely financed.

Fiscal and budgetary policy measures will be aimed at stimulation of economic activity by decreasing tax burden on economy and carrying out the balanced policy of public expenditures.

Implementation of the new Tax code norms, in particular, decrease of corporate income-tax rates from 30% to 20%, VAT rates from 13% to 12% in 2009, and liberalization of tax payers’ deductions system will allow enterprises to soften the negative implications of the current markets conditions and expand their own investment opportunities.

Given the current economic situation, the flexible budgetary investment policy will focus on financing the projects with multiplicative effect on economy and maintaining a necessary employment level. Thus, in the case of economic situation deterioration and reductions of budget revenues, the non-urgent expenditures will be optimized or postponed.

Budget deficit, state guarantees of liabilities will be kept at an acceptable level required to maintain the macroeconomic balance.

The Government jointly with "Samruk-Kazyna" National Welfare Fund JSC will strengthen the control over effectiveness of budget expenditures, including resources allocated for the Joint Action Plan implementation.

For effective realization of the declared measures, including the Joint Action Plan, the Government, the National Bank and the FSA will do a constant monitoring of economic situation in the country and global economic development trends and shall take adequate responding measures.