Recent economic developments
Kazakhstan was hard hit by the recent liquidity crisis. Economy growth was largely debt financed by local banks that aggressively attracted loans from foreign sources. When credit markets closed Kazakhstan’s financial system suffered liquidity problems and sharp fall in credit activity. This resulted in slower GDP growth in 2008.
Real estate prices in Kazakhstan fell sharply and many real estate projects have stopped. The quality of local banks' loan portfolios was largely affected by the downturns in the economy. In February 2009 Government of Kazakhstan took control over the country’s largest bank – BTA by purchasing 75% of its shares and exercised control over the fifth-largest bank - Alliance bank.
To mitigate the negative consequences on the social and economic situation in the country the government of Kazakhstan had launched a US$10 bln. anti-crisis programme. The programme concentrates on 5 major priorities:
- support of financial sector - US$ 4 bln.
- support of construction sector – US$ 3 bln.
- support of small and medium enterprises – US$1 bln.
- development of agricultural sector – US$ 1 bln.
- innovative projects – US$1 bln.
New tax code
Kazakhstan has introduced the new Tax code that is effective from the start of 2009. Under the new Tax Code the corporate income tax for non-resources sector of the economy is reduced to 20% (it will be reduced further to 17.5% in 2010 and to 15% in 2011). VAT is reduced by 1% to 12% starting from 2009.