Kazakh government has plans for economic development with low oil prices

Kazakh government and the country’s National Bank have several plans for economic development with low oil prices, head of the National Bank, Kairat Kelimbetov said on Jan.21.

He made the remarks during a plenary meeting in Majlis (lower house of the parliament).

“There is a popular saying: if you want to destroy the reputation of the predictor, then try to predict the oil prices,” he said. “Today the oil prices are at the level of $50 per barrel.”

Kelimbetov said it is supposed that either the prices will return to $70-$90, or drop to $20-$30 in a short period. “However, all experts suppose that on average, the oil prices will be close to $50.”

“Even if the oil prices will be lower, the government and the National Bank of Kazakhstan have relevant plans on policy for any scenario of oil prices,” he added.

He reminded that Kazakh economic today depends on the revenues from oil export.

Meanwhile, in order to avoid the period of instability, the country pursued countercyclical policy and created safety factor which allows to calmly pursue economic policy.

“Today our state reserve exceeds $100 billion,” the head of the National Bank said, adding that such figure in this sphere was never recorded in the country’s history before.

He reminded that the safety factor was two times less in 2008-2009. “But thanks to this (safety factor) we got out of the crisis that time.”

The National Fund was founded in 2001 in accordance with the order of Kazakh president. The revenues from oil were directed to the National Fund in order to eliminate the consequences of the crisis.

“Over $73.6 billion has accumulated in the National Fund, which is 3.3 percent more than in 2013,” Kelimbetov said.

This is while the reserve of the National Bank increased by 18 percent and stood at $28.9 billion. “All this together – the National Fund and the country’s gold and foreign exchange reserve is $102 billion which leads us to say that we have reliable reserve and safety factor.”