As of October 1, 2020, the external debt of Kazakhstan was about $160.9 billion or 90.7% of the GDP. However, 80% of the debt is owed by private organizations, so there is no risk for the state budget or population, according to Azat Uskenbayev, head of the National Bank’s Department of Balance of Payments.
As Uskenbayev underlined, the external debt of the government of Kazakhstan is just 8.2% ($13.2 billion) of the country’s debt. The so-called quasi-public sector owes 12.5% or $20.1 billion. The total debt of the government and affiliated organizations is 18.8% of the GDP, which is considered normal according to best international practices.
The current direct and indirect financial obligations of Kazakhstan’s government of $33.3 billion is 15.7% or $6.2 billion less than three years ago, thanks to early debt redemption as well as the quasi-public sector’s debt restructuring.
“Kazakhstan has been a net сredit country for years. As of October 1, 2020, its external assets exceeded the external obligations 4.3 times or by $43.0 billion. In other words, we loaned to others more than we owed. The biggest part of the country’s debt is businesses’ debt ($101.3 billion or 62.9%): Kashagan, Tengizchevroil and Karachaganak particularly. To make these projects work, foreign investors finance their companies registered in Kazakhstan. From the point of view of international methodology, these kinds of investments are considered as the country’s external debt,” Uskenbayev explained.
According to the official, an external debt does not necessarily mean an additional burden on the economy or country. If a country can make payments, the external debt might be seen as a source of foreign investments. As a result, that country can attract new technologies, create new jobs, increase taxes, speed up its integration into international supply chains and boost sales.
However, the total state debt in Kazakhstan constantly grows, primarily because of internal debt. For example, in 2020 the government had issued public securities to attract market investors. In terms of foreign debt, Kazakhstan has been trying to diversify its financial obligations by borrowing not only U.S. dollars but also euros and Russian rubles.