Kazakhstan’s parliament approves a $345 million loan from IBRD

Kazakhstan is going to borrow €345.7 million from the International Bank for Reconstruction and Development (IBRD). The Senate has already approved the relevant law.

According to Vice Prime Minister Erulan Zhamaubayev, all this money will be allocated to finance the country’s budget deficit.

«This loan will help us meet our obligations in terms of social and other budget expenditures. The repayment period is 11.5 years including a 2.5-year grace period,» he said to the Senate.

By taking this loan, Kazakhstan is obliged to pay an interest rate of 0.25% from the sum of the loan plus 0.25% of the commission charge for the undrawn portion of the loan. The country is going to make all these payments from the state budget.

Members of the Senate have supported the move by approving with one voice an agreement between Kazakhstan and IBRD. Now, the president has to say the last word and put his signature under the draft law.

In October Zhamaubayev promised to cut the budget deficit to 2.7% of the GDP. The rate is currently about 3.3%.

The loan from IBRD isn’t that big, said the vice prime minister. «We took much larger loans,» he said. The official also noted that the country’s budget deficit is tending to decrease rather than increase.