Interview - Head of National Bank expects growth of gross Domestic product by 8.5 - 11% in 2002
/REUTERS Almaty bureau, Alexey Kalmykov, Jonathan Tatcher, June 10, 02/ -
Growth of Kazakhstan economy in the current year will exceed predicted 7% and
will be 8.5 - 11% for high oil prices, stable inflow of direct foreign
investments and growth in financial sector, Grigoriy Marchenko, the Head of
National Bank of Kazakhstan, said in interview to Reuter.
Last year recourse economy of Kazakhstan, which advanced in structural
reforms, grew by 13.2%. Marchenko believes that it will be difficult to reach
this level, nevertheless, Government's and National Bank's forecast on 2002,
calculated using weighted average oil price Brent $19 per barrel, will be
"Two years (growth of 13% each year) at a run - it would be too much",
Marchenko said on Monday.
"I think that oil prices will stay within the range of $20-$25 per barrel till
the end of the year, and, without any doubts, the growth (of economy) will be
significant - somewhere from 8.5 to 10%. However, I am not excluding this
growth to be even 11%", added the Head of National Bank in English.
He said that pessimistic scenario, which includes a sharp worsening of world
markets conjuncture, and also worsening of the of situation in economy of main
partner of Kazakhstan - Russia, is not likely to happen. However, more clear
picture of 2002, in which the state planned an inflation of 6.5% having the
devaluation of national currency tenge of 3-4%, could be seen only at the end
of the third quarter.
"Don't count your chickens before they are hatched", Marchenko reminded.
He noted that high temps of growth would stay not only due to oil- under the
Head's calculation oil and gas sector accounts for 15% of GDP or one forth of
"Since the oil factor is not so important, as for example in countries of the
Middle East, however its meaning increases", Marchenko said. Kazakhstan
extracts about 40m tons of oil each year and is about to triple the extraction
in the nearest 15 years.
According to Marchenko's words a stable economical growth in Kazakhstan will
be mainly due to growing financial sector, and also direct foreign investments,
which volumes last year totaled 12% of GDP or $2.76bn.
He also reminded about expert estimations, which claim that 1.5-2% of GDP
growth is supported by big construction in new capital of Kazakhstan - Astana.
At the same time, leading banker of the state admits that inflows of foreign
investments and growth of deposits and pension accumulations forces
Kazakhstan to create internal production and develop financial market.
"It is necessary to develop service and production sector for needs of oil and
gas sectorЕ In the area of industrial policy this is the main priority",
He mentioned about the necessity to advance insurance and fund market,
acknowledged that solving of the first problem is put off after the occurrences
of September 11 in the USA, that influenced the situation with insurance
companies in the world. On the other hand, problem of building the liquid stock
market, which authorities and Marchenko personally are deciding on, becomes
more complicated by "interests conflict".
"If the main goal - to get as much money for the budget as possible, you would
sell stocks (state owned) to strategic investors of this organization. If you
are going to develop a stock market, it is necessary to sell cheaper. Here
comes the problems with Parliament and all the rest", - Marchenko said.
It is a difficult work, and I am not going only to criticize the Government.
Unfortunately, there is no single answer", he added.
At the same time, Marcenko noted tat fast-growing market of corporate bonds
and called it as possible among other possible instruments of financial market,
that allow effectively use domestic recourses of growth of corporate bonds with
state participation such as Development Bank of Kazakhstan, which is controlled
by Government, and Kazakhstan Mortgage Company, of which 40% are
owned.by National Bank, 40% - in process of selling to local banks, and 20%
will be sold to European Bank of Reconstruction and Development and
International Finance Corporation. The company is created for refinancing of
bank operations at the markets of mortgage loans.
In October of 2002 Kazakhstan will have to settle eurobond issue of $350m.
According to Marchenko's evaluation, two thirds of issue are held by local
investors. He believes that present situation forces to think about the
expediency of new issue.
"Where is the sense of issuing eurobonds, if it is clear that 80-90% of issue
will be in local investors' hands?.. We all have to think which instruments
will substitute settling securities in the portfolios of pension funds and
banks. This is a serious question", - Marchenko said.
He supposed that Ministry of Finance can issue 10-years indexed to inflation
rate GS of about $100m, and the rest capital can be borrowed with 5-,7- and
10-years bonds of Development Bank, created for financing the middle- and
long-term projects in economy, and also by floating the bonds of Kazakhstan
Mortgage Company of $50-$100m.