Kazakh President chairs enlarged government meeting

Kazakh President chairs enlarged government meeting

Kazakhstan is developing steadily, despite the serious geopolitical challenges. According to the results of the first half of the year, the growth of domestic economy amounted to 3.4 percent. At the same time, a real sector increased by more than four percent. Kassym-Jomart Tokayev stated this at an expanded government meeting.

“However, inflation also does not remain stable. Now this figure has reached 14.5 percent and exceeded the level of 2015. In the first six months, our economy recovered. But international institutions predict that Kazakhstan's GDP will grow by only 2 percent this year. Previously, they said that growth will be 3.7 percent. Therefore, the Government must ensure a sustainable development of the country's economy,” said President Tokayev.

The Head of State also spoke about the need to improve monetary policy, one of the main mechanisms for managing the economy. In particular, the banks should lend more to the real sector and manufacturers. The President instructed the National Bank, the Agency for Regulation of Financial Markets, along with the Government, to develop additional levers and incentives for involving financial institutions in the lending process.

“Today, we are witnessing a situation where a share of corporate lending, a key factor in economic activity, declines amid a rapid growth in consumer loans. Over five years, the share of corporate loans in the total volume of issued loans has decreased from 68 percent to 41 percent. Any more or less significant project has to be financed either at the expense of state development institutions or at the expense of loans from international financial organizations. And this is despite the fact that banks have 11 trillion tenge of highly liquid assets. In fact, this is a catastrophic situation, without any exaggeration. The financial regulator reports on the measures taken in terms of weakening prudential standards. However, as the data shows, these measures are not enough,” he noted.

President Tokayev demanded that the ministers and mayors, heads of agencies and national companies accelerate a pace of work as much as possible and use new methods to solve problems for the further socio-economic development of the country.