OVERCOMING CRISIS

/KASE, November 20, 08/ - The government of Kazakhstan has reduced economic growth forecast for 2009 to 3.0 % from previously planned 5.0-7.0 % and increased the amount of funds to stabilize the economy up to $21 bn. from $15 bn., The Prime Minister of Kazakhstan Karim Masimov said in an interview to Reuters. "Over 8 months of 2008 inflation made 8.7 %. Growth slowed down in autumn this year. That's why I think inflation will be within 10 %, maybe a little bit lower or higher" - The Prime Minister said in English. According to him, authorities expect the same rates of inflation growth next year. Kazakhstan has already announced on allocation of $15 bn. and $10 bn. from the National Fund for economy stability. Masimov said that authorities intend to use the assets of pension funds. "This year total volume, we are prepared to invest is $21 bn., of which $10 bn. will be allocated from the National Fund, the $5 bn. will be sent by the National Bank of Kazakhstan to maintain the liquidity of banks, about $5 bn. we will have from the pension funds and $1 bn. from stress assets Fund "- said the Prime Minister. "I think that $21 bn. is a good amount. This is about 20 % of our GDP", - he added. According to the Prime Minister, Kazakhstan, rich with oil and metals, has enough resources to overcome crisis consequences and is not intending to ask the help abroad. "First of all I think Kazakhstan has enough financial resources (to overcome crisis) to meet 2009. At this stage we are not intend to ask help form international financial organizations. I suppose we cope with it". Federal Reserve System (FRS) may reduce the basic interest rate to zero within the next two months in order to avoid deflation, experts of JPMorgan Chase & Co believe. Let us remind that the Bank of Japan last month lowered the basic rate to 0.3 % APR, while the European Central Bank doesn't reject a willingness to reduce the cost of money after two cuts over the past six months. [2008-11-20]