President Kassym-Jomart Tokayev signed the law "On the ratification of the Loan Agreement (Loan for Financing Development Policy Based on the Private Sector and a More Sustainable Economic Recovery) between Kazakhstan and the International Bank for Reconstruction and Development," the press service of the President of Kazakhstan reports.
The loan will be used in full to finance the budget deficit of Kazakhstan.
The loan agreement for the amount of EUR 345.7 million was signed on August 24, 2022. The funds are provided to Kazakhstan for 11.5 years, including a 2.5-year grace period. Servicing and repayment of the attracted loan will be carried out at the expense of the republican budget.
Earlier, the head of the Ministry of Finance of Kazakhstan reported that this year the budget deficit is 3.3% of GDP, or about 3 trillion tenge. Taking into account the need to service and repay previous debts, it is necessary to attract about 4 trillion tenge from the market. At the same time, about 75% of the necessary funds have already been attracted from the domestic market. But the domestic market of Kazakhstan is “shallow”, in addition, these loans are only for 2-3 years, Minister Zhamaubayev noted, that is, after this period, the Government of the country will have to repay a large amount of debt. Therefore, it is necessary to diversify debt. And the IBRD loan, according to the minister, is quite long-term, and even with certain currency risks, it is quite attractive. The rate on this loan does not exceed 2.5%, while rates on international markets are growing and amount to 4-5% per annum for loans of the same maturity, he added.
CentralasianLIGHT.org
Dec. 1, 2022