Support for producers of demanded foodstuffs will be strengthened in Kazakhstan to reduce the level of inflation
Images | Depositphotos
The issues of price stabilization for socially important food products (SIFP) were discussed at the Republican Headquarters in the Digital Office of the Government under the chairmanship of Prime Minister of the Republic of Kazakhstan Alikhan Smailov, press service of the Ministry of Trade and Integration reports.
As noted by First Vice Minister of Trade and Integration Arman Shakkaliyev, the increase in prices for SIFP since the beginning of the year amounted to 4.2%, and by the end of May - 0.7%. Astana (6.1%), East Kazakhstan region (5.3%) and Zhetisu region (5.3%) became the anti-leaders for this indicator this year. Most of all, onions, cabbage, rice and carrots have risen in price, while there is a decrease in prices for buckwheat, sugar, sunflower oil and flour.
The Ministry of Trade and Integration of the Republic of Kazakhstan has developed a new approach to reduce the inflation rate by 2 times, aimed at supporting producers of food products that make the greatest contribution to the growth of prices for SIFP. This includes beef, sunflower and butter, rice, sugar and vegetables. To date, 78 major manufacturers have been identified. The new algorithm will provide a focused approach to each product - from production and storage to sale.
Support measures will differ based on the specifics of production and current problematic issues of enterprises. Prices for the vegetable group of goods will be regulated by the conclusion of Social and entrepreneurial corporations forward contracts. At the same time, all work is planned to be carried out through a special information system that will cover the activities of regional Socio-entrepreneurial corporations, Food Corporations and their partners. This product traceability system will become an "Corporations " and their partners. This product traceability system will become an "electronic mirror" of price stabilization work.
Vice Minister of Agriculture Yerbol Taszhurekov said that the security of the domestic market for 29 main types of foodstuffs due to domestic production is 80% or more. The issue of import substitution will be solved comprehensively through the implementation of more than 900 investment projects in the agricultural sector until 2026 for a total amount of 2.8 trillion tenge. In particular, 270 projects worth 241 billion tenge were implemented in 2022, and another 291 projects worth 536 billion tenge are planned to be launched in 2023.
According to the operational data of the regions as of June 2, the republic has reserves of SIFP in the amount of 589 thousand tons, including more than 104.3 thousand tons of potatoes, 20.9 thousand tons of onions, 25.1 thousand tons of carrots and 28.8 thousand tons of cabbage. At the same time, from June to July, it is planned to harvest 218.3 thousand tons of early potatoes, 161.2 thousand tons of early onions and 30.3 thousand tons of early carrots. 96 thousand tons of cabbage have been harvested in the Turkestan region at the moment, the plan for June is 59.4 thousand tons, for July - 25.9 thousand tons. These volumes of early-ripening vegetables are sufficient to meet the internal needs.
Deputy Chairman of the Agency for Protection and Development of Competition Bolat Sambetov reported on antitrust response measures. In particular, 15 investigations have been appointed in relation to food markets since the beginning of the year, more than 150 acts of antimonopoly supervision have been registered.
Akims of Astana Zhenis Kassymbek, East Kazakhstan region Danial Akhmetov and Zhetisu region Beibit Isabayev also made reports on the measures taken.
The Prime Minister stressed that in general, in May alone, cabbage rose in price by 22.3%, carrots - 10.8%, onions - 9.6%, potatoes - 6.6%, which indicates inefficient work on the ground to provide the market with vegetables in the off-season.
The government has reviewed all price stabilization mechanisms, made appropriate changes to industry rules and legislation. All this organizational work is carried out jointly with akimats. At the same time, one of the factors of price growth is the lack of contracting in the regions", - Alikhan Smailov said.
He also noted the weak coordination on the part of the Ministry of Agriculture.
For price stability, the market must be constantly provided with sufficient supply. For example, the Ministries of Trade, Agriculture and akimats in February-March began to work with Tajikistan on the purchase of onions. However, it was purchased only in May, when the price for it increased by almost 10%. The moment of purchase of goods at an acceptable price was missed. Each region, knowing its specifics, should conclude contracts with producers in advance,- the Prime Minister stressed.
The Head of Government instructed to ensure the full implementation of the new algorithm for restraining prices for SIFP and the timely conclusion of contracts with agricultural producers, as well as to strengthen work on identifying unproductive intermediaries and controlling trade surcharges.
This information may not be reproduced without reference to Kazakhstan Today. Copyright of materials of News Agency Kazakhstan Today.
relevant news
Kazakhstan turns to high-value added manufacturing with building polyethylene plant it Atyrau region
Images | primeminister.kz
Prime Minister of the Republic of Kazakhstan Olzhas Bektenov met with the heads of the world's largest oil and gas chemical companies – President of China Petrochemical Corporation (SINOPEC) Zhao Dong and Chairman of the Board of SIBUR LLC Mikhail Karisalovб primeminister.kz reports.
The key issue is the joint construction of the first integrated gas chemical complex for polyethylene production at a cost of about $7.7 billion and a capacity of 1.25 million tonnes per year, which will account for 1% of the world's total capacity.
A tripartite protocol was signed during the meeting, officially finalising SINOPEC's entry into the project. The ownership structure of the plant is as follows: KazMunayGas 40%, SINOPEC 30%, SIBUR 30%.
Head of the Government emphasised the importance of the project due to its focus on the production of high value-added products.
A gas separation complex (GSC) will be built at the Tengiz field to supply the "Polyethylene" project with feedstock (ethane). The capacity of the GSC is 9.1 billion m3 of dry gas processing per year, of which 1.6 million tonnes of ethane is expected to be produced.
Ethane will be sent through the main pipeline from Tengiz to the Karabatan site (territory of FEZ NINT, Atyrau region), where the polyethylene plant will operate.
It is planned to produce about 22 grades of polyethylene using American licence technologies of Chevron Phillips and Univation, 40% of which will be premium grade. A wide range of applications for both industrial and household purposes makes polyethylene the most popular polymer in the world.
Polyethylene is used in the fields of medicine, prosthetics, defence, food industry, construction, space industry and others. This polymer is used in the production of a wide range of goods: from plastic wear-resistant pipes, construction materials, medicines, syringes, prostheses to bulletproof vests, clothing for astronauts and car parts. Target markets include Kazakhstan, CIS countries, China, Turkey and European countries. At the same time, for domestic consumption, the realisation price will be lower than the import price.
The Head of State has identified deep processing of hydrocarbons as one of the key areas of development of the oil and gas sector. The priority for our economy is high conversion production producing products with a rapid increase in added value in the technological chain with an export orientation. The added value between the initial feedstock ethane and the third conversion product polyethylene increases 20 times, from $80-90 to $1600-1800 per tonne. The Polyethylene project will certainly give a serious impetus to the development of both the manufacturing industry and the country's economy as a whole. According to experts' calculations, the contribution to the country's GDP by 2030 from the implementation of the project is estimated at approximately 1.2%," Olzhas Bektenov said.
The construction of the plant is planned to be completed by 2029. During the construction period more than 8 thousand jobs will be created, during the operation period about 850 jobs will be created.
It was noted that the project is realised with the support of the Government. The plant will be built on the territory of a special economic zone with the provision of appropriate infrastructure and special tax regime. In this regard, Prime Minister emphasised the attention of the project participants to the need to maximise the use of local potential.
We on the part of the state provide comprehensive support in the implementation of projects important for the country's economy. At the same time, we expect you to increase the share of local content. For this purpose, it is necessary to determine the list of goods and equipment that will be mandatorily purchased from domestic producers. Special attention should be paid to training of Kazakhstani specialists and transfer of competences. It is important for us to maximise the attraction of local personnel, including for management positions in the project. We count on a similar approach in the implementation of other joint projects," Prime Minister emphasised.
Thus, in addition to the plant "Polyethylene" it is planned to build a gas separation complex and a trunk pipeline.
This information may not be reproduced without reference to Kazakhstan Today. Copyright of materials of News Agency Kazakhstan Today.
Olzhas Bektenov and Head of the Sakha Republic Aysen Nikolayev discuss issues of trade and economic cooperation
Images | primeminister.kz
Prime Minister of the Republic of Kazakhstan Olzhas Bektenov met with the Head of the Republic of Sakha (Yakutia) Aysen Nikolayev, who arrived on a visit to Astana to participate in the opening ceremony of the Days of the Republic of Sakha in Kazakhstan, primeminister.kz reports.
The Republic of Sakha contributes to the development of Kazakhstan-Russia trade relations. The implementation of agreements reached at the level of the presidents of Kazakhstan and Russia on further expansion of bilateral trade and economic cooperation was reviewed.
Over the year, trade turnover between the regions of Kazakhstan and the Republic of Sakha has grown almost 2-fold, exceeding $160 million, with over 99% of exports of Kazakhstani goods. During the discussion a wide potential of mutual trade was noted and the parties' readiness to increase turnover in agricultural, industrial and IT spheres was outlined.
The parties confirmed their intention to intensify joint work on expanding the range of supplied goods and services, establishing direct contacts between business circles. It is expected that a new impetus to trade and economic relations will also be given by the launch of five major cross-border trade centres in Kazakhstan, including the Eurasia Cross-Border Trade Centre on the border with Russia.
Special attention was paid to the exchange of experience and technologies in the field of creative industries and digitalisation, as well as interaction between research institutes and educational institutions of Kazakhstan and the Republic of Sakha.
This information may not be reproduced without reference to Kazakhstan Today. Copyright of materials of News Agency Kazakhstan Today.
ADB: Kazakhstan's economy to grow 3.8% in 2024, 5.3% in 2025
Images | Depositphotos
According to a new Asian Development Bank (ADB) report, Kazakhstan's economic growth rate is projected to decline in 2024 due to a slowdown in the industrial sector caused by stagnant oil production but is expected to recover in 2025 with gains in mining and investment, reports Kazinform News Agency correspondent, citing the bank’s press service.
Economic prospects
ADB forecasts that GDP growth will slow in 2024 but recover in 2025. Growth is forecast to decline to 3.8% in 2024, with industry slowing due to stagnant oil production, before accelerating to 5.3% in 2025 as the expansion of the Tengiz oil field leads to higher oil production starting from the second quarter of 2025.
The prospects for Kazakhstan’s economic development look positive in the medium term," said ADB Country Operations Head in Kazakhstan Iskandar Gulamov.
However, the economy’s dependence on commodities makes such growth volatile-so structural reforms are key to bolstering the country’s economic resilience and sustainability," he added.
Despite a slowdown in 2024, economic growth is expected to be bolstered by consumer spending and investment demand. The anticipated growth in consumption is forecasted to moderate to approximately 4% in both 2024 and 2025 due to a slower increase in real disposable incomes.
Services growth is forecast to slow to 4.7% in 2024 after record growth in 2023 before rebounding to 4.9% in 2025, supported by trade, transport and hospitality, and trade facilitation between Europe and Asia. Industrial growth is forecast to slow to 3.5% in 2024, with smaller gains in mining, and accelerate to 5.7% in 2025 as oil production increases.
Investment growth in Kazakhstan is also projected to moderate, reaching 14.5% in 2024 and 9.0% in 2025, following the completion of significant infrastructure projects. Despite the support from state-sponsored housing construction initiatives and endeavors to attract foreign investment, these factors are expected to contribute to the overall moderation in investment growth.
Inflation rates
ADB forecasts that service prices are forecast to be the main source of inflation, rising 9.8% in 2024 and 8.1% in 2025 due to government-announced increases in utility prices.
The National Bank of Kazakhstan will gradually ease monetary policy and reduce the policy rate in line with the decline in inflation and inflationary expectations. However, rising utility prices and continued strong domestic demand will keep inflation above the National Bank's 5% target.
Caucasus and Central Asia economies
According to an ADB report, Caucasus and Central Asia economies will slow after the boost from re-exports and Russian migrant inflows in 2023. Growth in the subregion is forecast to fall to 4.3% in 2024, down from 5.3% in 2023 bouncing back to 5.0% in 2025.
In Uzbekistan, growth is forecast to moderate to 5.5% in 2024 and 5.6% in 2025 from 6% in 2023, as services, agriculture, and domestic demand cool on persistent inflation and slower growth in household income.
In the Kyrgyz Republic, growth is projected to moderate in 2024 and 2025 with smaller gains in construction and services. Inflation should decline under continued tight monetary policy.
This information may not be reproduced without reference to Kazakhstan Today. Copyright of materials of News Agency Kazakhstan Today.