New Economic Course

On March 17, the Central Communications Service held a press conference "On the new state planning system, the National Development Plan, national priorities and the concept of Public Administration". The report was made by the Minister of National Economy of the Republic of Kazakhstan Asset Irgaliyev.

The national development plan of the country until 2025 was developed taking into account the new economic reality caused by irreversible structural changes in all spheres of life. According to the minister, at present, production processes are taking on a regional character, as a result of reducing the focus on minimizing the cost of production in favor of reliable supplies. In addition, in the context of a global decline in investment activity, there is a tightening of competition for attracting high-quality investments.



"As a result of the pandemic, global GDP has fallen to a record level in peacetime - by 3.5%. At the same time, global debt has reached a new historical high. The situation on the world oil market and other commodity markets has changed significantly. The pandemic is shaping a new global trade order, reinforcing trends towards self-sufficiency and protectionism," Asset Irgaliyev said.

Speaking about Kazakhstan's GDP, the minister noted that the forecast for the gross domestic product may change upwards.

"Now, within the framework of clarifying the budget, we are starting to form a new round of forecasts for the next three years in the Government. In particular, we will update our forecast for 2021. Probably in the direction of a small increase. This is also due to the fact that the external economic situation has changed. We see how the price of oil has changed recently and we see that our economy is gaining momentum in certain sectors," Asset Irgaliyev said, answering journalists' questions. According to him, the forecast of GDP growth in the current year may tentatively increase to 3.1%. Note that last year, GDP growth for 2021 was projected at 2.8%.

Commenting on the situation with the state debt of Kazakhstan, the head of the department said that this issue is under special control of the Ministry.
 
"Today, the level of public debt is about 30% of GDP," he explained.

The Minister informed that the big three rating agencies assessed the stability of the fiscal policy of Kazakhstan, noting the low level of public debt. "If you compare it with other countries, with the European Union-there they have a debt level of about 80%, on average in the OECD countries-about 100%." According to the head of the Ministry of National Economy, KZT 900 bln is allocated annually for servicing the state debt.

The National Development Plan forms the main parameters of the country's new economic course in the medium term, aimed at leveling the consequences of the coronacrisis, as well as the development of a sustainable and inclusive economy. According to the minister, one of the most important priorities in the near future is to reduce the unemployment rate to 4.7% by 2025.

As Asset Irgaliyev explained, the national priority "Fair Social Policy" provides for the implementation of systemic measures aimed at promoting productive employment and ensuring social well-being.

"To restore the labor market and reduce the unemployment rate, measures will be taken to modernize existing ones and create new jobs. The introduction of new progressive forms of labor relations will ensure the development of flexible forms of employment. Conditions will be created for continuous self-education and professional development, as well as the system of job forecasting will be improved," the minister said.

He specified that the sphere of social security will be regulated by the Social Code of the country.

"The result of the measures taken by 2025 will be a reduction in the unemployment rate to no more than 4.7%. All social obligations of the state on social payments and allowances will be completed in full. The indexation of social payments will be provided taking into account the level of inflation, as well as the transition from the declarative to the revealing form of providing social services," Irgaliyev said.

The national priority "Balanced Territorial Development", in turn, provides for unlocking the potential of the regions and strengthening the competitiveness of their socio-economic systems.

According to Asset Irgaliyev, the spatial development policy will focus on the development of "growth points", taking into account managed urbanization and the principle of "people to infrastructure", as well as" economic corridors", which together will form the supporting framework of the country and a single internal economic space. As a result, by 2025, the level of urbanization will be 62.6%.

It should be noted that the Map of strategic indicators until 2025 will be an indicator of progress in the implementation of the tasks of the National Plan.

The map includes a list of 41 indicators in three areas, structured by industry, region, with the assignment of responsible state bodies.

"The result of the practical implementation of the National Plan will be to ensure economic growth at a level of more than 5% by 2025," the Minister of Economy concluded.