Kazakhstan to Borrow 1.5 Billion Euros to Fight COVID-19

Deputies of the Mazhilis (lower house of Kazakhstan’s parliament) ratified agreements with the Asian Development Bank and Asian Infrastructure Investment Bank on two loans of €908.5 million and €661.8 million respectively. 

The Asian Development Bank’s loan will be provided in two equal installments. Half of the funds must be returned within five years and the rest of the money within ten years.

A loan from the Asian Infrastructure Investment Bank is provided to Kazakhstan with a maturity of ten years, including a three-year grace period.

According to Yerlan Zhamaubayev, Kazakhstani finance minister, there are three main areas where this money will be spent.

“First of all, it’s the fight against COVID-19, I mean anti-epidemiological measures, treatment of patients who are falling sick with coronavirus, to stimulate doctors. The second direction is supporting the economy in case of a downturn. This includes adding new jobs as well as additional incentives to boost the labor market. The third area is support for small and medium-sized businesses,” he said.

As Zhamaubayev noted, these funds will be playing a significant role given the established budget deficit in the country. For instance, the loan from the Asian Infrastructure Investment Bank will be used to finance the 2021 budget deficit.

In general, the total number of anti-crisis measures in Kazakhstan, excluding tax benefits and what authorities did locally, amounted to 5.93 trillion tenge ($13.9 billion). More than half of that money, 3.46 trillion tenge ($8.1 billion), was paid from the state budget and 2.47 trillion tenge ($5.8 billion) from extra-budgetary funds.