Kazakhstan’s government doesn’t want Samruk Kazyna and Baiterek to borrow too much 

The government of Kazakhstan is going to set a cap for external debt by Samruk Kazyna and Baiterek of $12.5 billion and $5 billion, respectively.

«I am ordering: 1. To approve the maximum amount of external debt for the quasi-state sector for 2024,» the edict by National Economy Minister Alibek Kuantyrov says. The document has been published for public consideration.

According to an annex to the document, the maximum amount of external debt for the quasi-sector is expected to be at $12.5 billion for Samruk-Kazyna and $5 billion for Baiterek. For external debt purposes, the government uses an exchange rate of 460 tenge per one USD.

The order will enter into force ten days after its official publication in the media. The vice minister of the national economy is going to be responsible for the implementation of the order.

According to an explanatory note by Deputy National Economy Minister Azamat Amrin, the new rule won’t require any expenditures from the state budget. Moreover, no negative socio-economic or legal consequences for national security are expected.

On December 29, 2022, the government restricted the amount of aggregated public debt and debt of the quasi-state sector to 53.5% of the GDP. For instance, the ceiling for quasi-state sector debt can’t be higher than 21.2% of the GDP. According to the Agency for Strategic Planning and Reforms, over the period from January to June, the national GDP grew by 5.3% to $104.6 billion compared to the same period last year. If this growth rate persists, the GDP will surpass more than $209 billion this year.

The maximum cap of the debt doesn’t include mutual liabilities of organizations controlled by the government as well as liabilities controlled by nonresident entities.

At the same time, the amount of external debt of the government, which includes external debt guaranteed by the government and external debt of the quasi-state sector, mustn’t exceed 75% of foreign currency assets in the National Fund. As of late November 2023, the fund reported $58.6 billion in such assets.

Once adopted, the document will also require national companies and other subjects of the quasi-state sector to prepare a five-year plan for raising funds four times per year and send it to the government. The holding of Samruk Kazyna will be obliged to publish such plans on its website.

The government has been adopting all these changes to meet the requirements of the concept for state funds management until 2030 adopted at the end of 2022. According to that document, budget deficits were caused by borrowings and expansion of the public debt.