Rate of Investments in Fixed Capital Reduces in Kazakhstan

The main reason for the reduction is a cut in investments into the oil industry

In 2020 the volume of investments in Kazakhstan was 3.4% less than the year before. This is the first time in over five years when the rate of the physical amount of these investments in fixed capital is showing a negative value. 

According to state data on fixed capital investments from 2016 to 2019, the flow of such investments was steady. However, in 2020 it declined.

Roughly 12.3 trillion tenge ($29.2 billion) has been spent over 12 months of 2020 for business development. It is a bit less than in 2019 when 12.5 trillion tenge ($29.7 billion) was invested for these purposes. The number of investments from internal funds of companies declined by 1.3 trillion ($3 billion) or 14% while the state investments have risen instead by 864 billion tenge ($2 billion) or 58%.

As data shows, the biggest decline in investments happened in the mining industry, which includes oil and gas (-26%). In 2020 this sector received 4.1 trillion tenge ($9.7 billion) or 1.4 trillion ($3.3 billion) less when compared to 2019. The amount of investments into the oil industry has declined by 30% to 3.3 trillion tenge ($7.8 billion).

These changes are also reflected in regional data. For example, in 2020 Atyrau region lost one trillion tenge of investments (-23.1%) even though the share of this region is still impressive – 26.9%. Among other regions that lost money were West Kazakhstan (-21.6%), Kyzylorda (-26%) and Karaganda regions (-16.7%).

Some regions, however, reported a rise in fixed capital investments. Thus, the Turkestan region was able to increase this rate by 59.4% or 262 billion tenge ($623 million). In addition, about 278.5 billion tenge ($662 million) was spent on the development of the town of Shymkent in 2020.

Despite shrinking investments in the oil industry, some sectors have shown growth: the processing industry (+3%), transportation and warehousing (+5%), realty (+33%) and agriculture (+15%).

As Kursiv edition wrote before, Kazakhstan’s government has had big expectations about investments that may help the country rebound after the pandemic. According to Prime Minister Askar Mamin, who is also the head of the Coordination Council on Investments, the rate of competition in this area will grow rapidly and Kazakhstan has to improve its investment climate.

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