According to him, by the end of 2024, subsidies amounting to 296 billion tenge have still not been paid in the agricultural sector, which farmers have covered by taking loans. Additionally, there is a further requirement of 110 billion tenge for 2025.
“Farmers often wait up to 2 years for their applications to be fulfilled. Due to delays in payments from the state, they are forced to cover their losses through expensive loans from second-tier banks, which worsens their financial situation,” the deputy emphasized, suggesting that the Government and the National Bank should consider activating the money-printing press instead of claiming that “there is no money.”
In Parliament, in response to a question from one of the Majilis deputies asking, “Can’t we solve the shortage by printing more money?” Timur Suleimenov replied.
According to the head of the National Bank, regardless of the goals and volumes of the Central Bank's “money printing,” stimulating the economy has direct negative consequences.
Excess money in the market fuels inflationary processes and contradicts efforts to maintain price stability.
“The econometric models and practical experiences of many countries clearly show that unbacked emission negatively impacts economic growth. In other words, “money printing” could undermine all actions and progress achieved by the Government and the National Bank towards macroeconomic and social stability,” he stated.
In Venezuela and Zimbabwe, central banks printed additional money to cover budget deficits, resulting in recorded inflation rates in the millions.
“Just like any other segment of the economy, targeted emission proposed for financing agriculture is not feasible. Money does not remain within the sector; it creates imbalances between supply and production volumes, permeating all other sectors of the economy. This, in turn, leads to increased inflationary processes and a decline in the purchasing power of the national currency. These processes affect the most vulnerable groups of the population since inflation impacts everyone, and the lower the income, the harder it becomes to combat it. That’s why inflation is referred to as the ‘tax on the poor,’” Timur Suleimenov clarified his statement.
Market analysts this time focused not on the response of National Bank Chairman Suleimenov, but rather on the weight of the question posed to him.
Financial experts met such economically unfounded questions from the Parliament with light laughter. The Majilis deputies should have been aware of how much tenge the market can bear and that excess funds could trigger inflation. In January, the National Bank reduced the money supply by 4.1%, absorbing 594.3 billion tenge. According to the document published on the regulator’s website, the money supply decreased to 14 trillion tenge within a month.
Immediately after the decision, the money in circulation dropped from 14.6 trillion tenge to 14.0 trillion tenge. In our country, the growth rate of the money supply exceeds the growth rate of production by more than ten times. If the growth of the money supply is not balanced by economic resources, inflation will rise. Therefore, the government must have a plan of action to mitigate the impact of any inflation rate, which the Majilis deputies should be aware of.