| ASTANA, March 2
ASTANA, March 2 Higher-than-expected oil prices
may push Kazakhstan's gross domestic product growth to 2.8
percent this year, above the recently updated official forecast
of 2.5 percent, Economy Minister Timur Suleimenov told Reuters
in an interview.
The resource-rich Central Asian nation would see economic
growth above the government's initial forecast, if the Brent
crude oil benchmark averages $55 a barrel or more this
year, Suleimenov said.
"The main drivers (of growth) are the basic industries...
oil and gas, obviously and the rising prices of metals," he said
"Under an optimistic scenario, with oil price at $55 or
more, we may see GDP growth of up to 2.8 percent."
Kazakhstan last month revised its state budget, raising the
expected average Brent crude price to $50 a barrel from
Kazakhstan plans to produce 81 million tonnes of crude oil
and gas condensate this year, up from 78 million tonnes in 2016,
despite joining an OPEC-led output cut for the first half of
Suleimenov said this would be possible because the cut had
been agreed from November 2016 levels when Kazakhstan's output
was already high thanks to the giant Kashagan field coming
Kazakhstan set up the National Fund with excess oil revenues
in 2000, and has since built up substantial reserves - peaking
at $77 billion in 2014. Now, it is using them to finance state
spending on items such as infrastructure.
In the budget review last month, authorities said they would
also set aside 2 trillion tenge ($6.4 billion) into the
state-owned 'bad bank', the Problem Loans Fund, in order to buy
distressed assets from local banks.
"The main creditor of the economy has always been and should
be the banking system, where the situation at the moment is
complicated," Suleimenov said.
"Without resolving this issue, we will remain its hostages,
meaning that we will have to spend public funds and money from
the National Fund (to finance broader economy). Therefore, it is
better to resolve this issue once and, hopefully, for all."
At the same time, Kazakhstan was limiting withdrawals from
the National Fund to finance the state budget deficit. The
government plans to borrow about 1 trillion tenge ($3.2
billion)on the domestic market this year, Suleimenov said.
The main investor on the domestic securities market was the
state-managed pension fund.
(Writing by Olzhas Auyezov; Editing by Randy Fabi)