ALMATY (Reuters) – Kazakh President Kassym-Jomart Tokayev ordered the government on Tuesday to increase state pensions and welfare payouts by 10%, provide more tax breaks for small businesses and boost spending on subsidies.
The Central Asian nation’s economy has been hit hard by the plunge in the price of oil, its main export, and the coronavirus outbreak which has prompted border closures and lockdowns.
The increase in welfare payments will cost more than 200 billion tenge ($446 million), said Tokayev, who also instructed the government to allocate an extra 100 billion tenge ($223 million) toward subsidized loans for farmers.
Tokayev ordered the cabinet to make more people eligible for emergency monthly payouts of $95 per person and free kits including food products and other basic necessities.
He said the authorities would extend tax breaks for small businesses to payroll taxes and work with banks to ensure they restructure loans to those companies.
Kazakhstan is in talks with its partners in the Russia-led Eurasian Economic Union trade bloc about temporarily scrapping import duties on essential imports such as food products, Tokayev said.
He did not say whether those measures would require additional funding or if money would be redirected from other items. The government said on Sunday it would tap the rainy-day National Fund for an extra $4.1 billion this year.
Kazakhstan’s finance ministry has also stepped up domestic borrowing, raising 250 billion tenge ($558 million) in a nine-year treasury bond auction on Tuesday with a yield of 11%. It used to borrow much smaller sums in such auctions earlier this year, keeping the yield below 10%.
(Reporting by Olzhas Auyezov; Additional reporting by Mariya Gordeyeva; Editing by Gareth Jones)