ALMATY, Aug 25 (Reuters) - A spike in projected budget deficits over the next few years will bring Kazakhstan’s rainy-day National Fund close to its minimum balance beyond which the government will no longer be able to tap it, the central bank warned on Tuesday.
The oil-exporting Central Asian nation plans to rely heavily on its $65 billion fund in the coming years to fill the budget gaps, and despite growing nominally the fund will shrink in proportion to gross domestic product GDP), central bank governor Yerbolat Dosayev told a government meeting.
“As a result, by the end of 2023 National Fund assets will stand at 30.8% of GDP, approaching the minimum balance of 30% of GDP,” he said.
Dosayev urged the cabinet to take measures to reduce the deficit under the new counter-cyclical budget rules.
Kazakh laws prohibit drawdowns from the fund that would leave it below 30% of GDP - although the figure used to be 20% earlier and could in theory be changed again.
Kazakhstan plans to tap the fund for 4.8 trillion tenge ($11.5 billion) this year and 3.7 trillion tenge ($8.9 billion) next year. ($1 = 418.2700 tenge) (Reporting by Olzhas Auyezov; Editing by Kim Coghill)
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