Kazakhstan

Economy
Buoyed by high world crude oil prices, GDP growth figures were in 2000, 2001, 2002, 2003, 2004, and 2005: 9.8%, 13.2%, 9.5%, 9.2%, 9.4%, and 9.2%, respectively. Other major exports of Kazakhstan include wheat, textiles, and livestock. Kazakhstan forecasts that it will become the world's leading exporter of uranium by the year 2010.
Its principal challenge since 2002 has been to manage strong foreign currency inflows without sparking inflation. Since that time, inflation has not been under strict control, registering 6.6% in 2002, 6.8% in 2003, and 6.4% in 2004.

In 2000 Kazakhstan became the first former Soviet republic to repay all of its debt to the International Monetary Fund (IMF), 7 years ahead of schedule. In March 2002, the U.S. Department of Commerce granted Kazakhstan market economy status under U.S. trade law.

This change in status recognized substantive market economy reforms in the areas of currency convertibility, wage rate determination, openness to foreign investment, and government control over the means of production and allocation of resources.

In September 2002 Kazakhstan became the first country in the CIS to receive an investment-grade credit rating from a major international credit rating agency. As of late December 2003, Kazakhstan's gross foreign debt was about $22.9 billion. Total governmental debt was $4.2 billion.

This amounts to 14% of GDP. There has been a noticeable reduction in the ratio of debt to GDP observed in past years; the ratio of total governmental debt to GDP in 2000 was 21.7%, in 2001 it was 17.5%, and in 2002 it was 15.4%.

The upturn in economic growth, combined with the results of earlier tax and financial sector reforms, has dramatically improved government finances from the 1999 budget deficit level of 3.5% of GDP to a deficit of 1.2% of GDP in 2003.

Government revenues grew from 19.8% of GDP in 1999 to 22.6% of GDP in 2001, but decreased to 16.2% of GDP in 2003. In 2000, Kazakhstan adopted a new tax code in an effort to consolidate these gains. On November 29, 2003 the Law on Changes to Tax Code was adopted, which reduced tax rates.

The value added tax fell from 16% to 15%, the social tax from 21% to 20%, and the personal income tax from 30% to 20%. (On July 7, 2006 the personal income tax was reduced even further to a flat rate of 5% for personal income in the form of dividends and 10% for other personal income.) Kazakhstan furthered its reforms by adopting a new land code on June 20, 2003, and a new customs code on April 5, 2003.