Minister of National Economy Timur Suleimenov reported that in January-August 2011, the positive trend of Kazakhstan's economic growth remains. At the same time, economic development is taking place in conditions of increasing risks and volatility in world markets.

"GDP growth for the reporting period was 3.8%. To fulfill the task of 4% GDP growth, it is necessary to ensure an average monthly growth of 4.2% by the end of this year," Suleimenov said.

The growth in output of agricultural production in the seven months amounted to 2.4% against 3.5%. There is a slowdown due to 1.5% decrease in crop production because of a decrease in harvesting in Akmola, Pavlodar, North Kazakhstan and East Kazakhstan regions. Livestock raising increased by 3.9%.

The construction sector, with a target of 3.6%, grew by only 0.8%. For seven months, growth was 1.3%. The production of services declined to 3.7% from 3.8% in January-July. The target is 4.1%. This is due to a slowdown in growth in information and communication services by 0.7 percentage points to 4.5% (seven months — 5.2%), scientific and technical activities — by 0.2 pp to 2.5 % (seven months — 2.7%).

At the same time, trade increased by 5.8% (target — 3.9%) and transport — by 4.8%. Investments in fixed assets increased by 21.4%, including private investments — by 26.8%.

In his report Suleimenov drew attention to the decline in production indicators in some regions.

"In the North Kazakhstan, West Kazakhstan, Turkestan and Kyzylorda regions there is a decline in industrial production. The growth is lower than the republican level in Almaty, Mangistau, Pavlodar, Karaganda regions, as well as in Astana, Almaty and Shymkent with dynamics ranging from 1.1% to 3.9%," the minister reported.

In these regions, according to the ministry, oil and gas condensate, uranium ore, freight wagons and flour production were reduced.

In agriculture, a positive trend continues in 12 regions. At the same time, West Kazakhstan region has moved to a negative zone. The decrease was 1.7% due to a decrease in harvest. In Akmola region, the level of 2017 was maintained.

Construction shows negative values in Astana and Pavlodar region. In Astana the decline deepened from (-19.1%) in seven months (-21.7%).

Foreign trade turnover steadily keeps a high growth trend. For seven months, it increased by 20.1% ($51.9 billion). Exports increased by 26% ($34 billion). At the same time, the increase in exports of non-primary goods amounted to 4.1% ($9 billion). Import increased by 10.3% ($17.9 billion). In general, growth is provided by imported investment goods (machinery and equipment). Their increase was 17.2%.

The labor market remains stable. From the early 2018, 297,100 people were employed (as of August 1). Wages are growing at a moderate pace. In January-July, the average monthly salary was 157,700 tenge and grew by 2.3% in real terms. Real monetary income in January-June increased by 1%.

"To achieve annual targets, there are four months left. In terms of GDP, this is 3.8%. But the desired result is 4%. This is not an easy task, given the growing international trade conflicts and volatility in the financial market," Suleimenov reported.

The minister noted that taking into account the base of the last four months of 2017, as well as its historical share over the last six years in the final GDP, on average from 42% to 58%, it is necessary to ensure the growth of the sectors by the end of the year at the levels:

industry — 5.7%, including processing — 5.6%;

agriculture — 4,4%;

construction — 3.7%;

services — 3.8%, including trade — 5.8%, transport — 4.8%, communications — 4.5%.

"Given the accumulated GDP growth rate since the beginning of the year, the 4% target remains feasible. However, it is possible to not achieve the target growth rates in such sectors as pharmaceuticals, food and beverage production, oil refining, and agriculture. In these industries, it is necessary to ensure, by the end of the year, an average monthly growth rate in the range of 4-9% for qualitative growth rates of the economy," Minister Suleimenov reported.

Having heard the report of the minister of national economy, Prime Minister Bakytzhan Sagintayev noted that low indicators in 11 regions are not a favorable trend in the economy. Also, the decline in indicators is observed in the areas of construction and investment.

"Everything that you said is correct, but when you showed the fifth and sixth slides, you said that a favorable trend remains. If you talk about production, then the industrial indicators in 11 regions lag behind, so why is it favorable? Then look at the construction, investments: only in four regions it is higher than the republican level, but what does this mean? If there is no investments in fixed assets, production will not develop, what favorable situation can be talked about, it is necessary to put demands first of all to ourselves, and only then teach the others," Sagintayev said.

Minister of Finance Bakhyt Sultanov reported on the main indicators of budget execution for eight months of 2018. Thus, the main indicators of the budget have been significantly improved.

The state budget received income (without transfers) 5,252 trillion tenge. Thus, the revenues collected are more by 74 billion tenge than for 2015. The growth of revenues was undoubtedly affected by the improvement of macroeconomic indicators in all sectors of the economy, the growth of prices for oil and metal. This was also facilitated by an increase in the effectiveness of tax and customs administration procedures.

"Current plans for income at all levels of budgets are overfulfilled. The state budget — 104.7%, the republican budget — 103.7% and the local budget — 107%. And there are no problems until the end of the financial year with the implementation of the updated plan," Sultanov reported.

Expenses in the reporting period were made in the amount of 7.439 trillion tenge. Of these, 55% are directed to the social sphere (in the eight months of last year — 40.8%). The percentage of development by expenditure is quite high: the state budget — 97.9%, the republican budget — 98.6% and the local budget — 97.8%.

476.3 billion tenge is provided for the implementation of the Nurly Zhol State Program in the republican budget for 2018. According to the Ministry of Finance, the development of the state program at the republican level is quite good. As of September 1, 248.4 billion tenge or 99.5% of the plan was spent for the reporting period. The development to the annual plan was 52.2%.

"Expenditure of budgetary funds is also on constant control. In the reporting period, 923 billion tenge of budget funds were covered by audit. There is a decrease in financial violations compared to the same period last year. A total of financial violations amounting to 86.6 billion tenge were established. During the audit, 53.3 billion tenge was recovered," the finance minister said.

As part of the privatization, out of 887 objects of the Comprehensive Plan as of September 1, 515 objects were put up. Of these, 435 objects were sold for 246 billion tenge. 269 objects are at the stage of reorganization and liquidation due to the economic inexpediency of their sale, including unrealized by the results of three trades. Thus, the implementation of the Comprehensive Privatization Plan, taking into account the reorganized and liquidated facilities, as of September 1, amounted to 79.4%.

In general, as Sultanov noted, the privatization process is in accordance with sales schedules. By the end of 2018, 70 objects are to be put up, of which 15 are republican property, 24 are municipal property, 31 are assets of national holding companies and national companies.

Chairman of the National Bank Daniyar Akishev, in his turn, said that inflation for January-August 2018 was 2.9%, which is lower than the same period last year. Annual inflation in August slowed to 6% compared with 7.1% at the end of the previous year. According to the results of the population survey in August, the quantitative estimate of the expected inflation for the year ahead is 5.9%, practically equaling the level of the current annual inflation.

According to the estimates of the National Bank, in 2018 inflation will remain in the target corridor of 5-7%. However, in the last few months, the risks have increased that in the future inflation will decline more slowly than the National Bank estimated earlier.

"Inflation in 2019 will be formed near the upper boundary of the target corridor, which is defined in the corridor 4-7%, that is about 6%. This is due both to the influence of external factors and to the expansion of domestic aggregate demand. In this regard, it is necessary now to take additional measures to keep inflation in the target corridor," Akishev said.

Since the beginning of 2018, the base rate has been reduced from 10.25% to 9%. However, the National Bank does not exclude the tightening of monetary conditions until the end of 2018, if the estimates for inflation risks are confirmed.

It was also noted that in the currency market, the tenge rate from the beginning of the year to September 10 weakened by 13.8% and amounted to 378.11 tenge for $1. In addition to the fall in the Russian ruble from the beginning of the year by 22%, the tenge is influenced by the factors of considerable weakening of the currencies of developing countries against the dollar.

Akishev noted that the National Bank corrects the fall of the exchange rate, when the demand for the currency is much higher than the supply, but on the whole it does not impede the fundamental trends. At the current moment, this leads to volatility of the course, but on the long-term horizon it provides macroeconomic stability and the balance of payments. The current situation does not pose a threat to financial stability and the situation in banks.

Since September 10, 2018, the National Bank has changed the approach to the formation of the official tenge. Now the official rate is set based on the results of the main additional session with the timing of settlements on the Kazakhstan stock exchange. This approach is fully consistent with international practice. The results of yesterday's trading showed that the transition to a new calculation was carried out successfully and did not cause inconvenience to market participants.