20 Oct 2009 14:07

Kazakh 2009 budget deficit rises to 3.5% of GDP

ASTANA. Oct 20 (Interfax) - Kazakhstan's budget deficit in 2009 is now projected to total 3.5% of GDP following cuts to both revenue and spending targets, Economy and Budget Planning Minister Bakhyt Sultanov said.

The budget deficit was previously projected to total 3.4% of GDP.

"The 0.1% rise in the budget deficit is the result of a drop in GDP," Sultanov said at a government session in Astana on Tuesday.

The absolute size of the projected deficit remains unchanged at 573.6 billion tenge.

The revenue target in 2009 was cut by 40.5 billion tenge to 2.797 trillion tenge. Spending was reduced by the same amount to 3.370 trillion tenge.

Sultanov said that imports for the full year are now forecast to fall $583.1 million to $34 billion.

"Imports are declining due to the economic slowdown and falling demand," he said.

The revised budget calls for real GDP to edge up 0.1% in 2009.

"The slowdown in growth compared with the previous forecast this spring is due to declines in industrial output and construction volumes, as well as services, stemming from the crisis," he said.

The government also forecasts inflation to be lower.

"Inflation at the end of December 2009 is estimated at 8%-8.5%, which is 2.5-3 percentage points below the previous forecast," he said.

The tenge devaluation earlier this year did not drive up domestic prices as substantially as expected, he said.

The official exchange rate on October 20 was 150.73 tenge/$1.