Budgetary amendments hint inflation to remain elevated in 2H25

KAZAKHSTAN - In Brief 20 Aug 2025 by Evgeny Gavrilenkov

As the Kazakh economy grows fast, budget revenues not related to the oil price (and the exchange rate) grew steadily in July, especially on the local level. In 7M25 local budgets accumulated 57.4% of the upwardly amended yearly revenues. The government amended expected local budget revenues by KZT0.8 trln and now expects them to reach KZT16.2 trln. Being inspired by steadily rising revenues the government decided to amend local expenditures by KZT1.7 trln. Local budget expenditures have to rise up to KZT16.7 trln this year and get close to still unamended 2025 republican budget spending (KZT25.3 trln). It means that the spending of local governments becomes increasingly important for the country’s entire macro picture. In 7M25, local spending amounted to 51.5% of the amended plan as KZT3.1 trln was left unallocated for the amended 7M25 spending. It means that in the remaining months this liquidity will flood the market. On top of that, KZT1.1 trln of expenditures were left unallocated on the republican level. It means that KZT4.4 trln of additional liquidity will be pumped into the system in the next months, therefore keeping inflationary pressure elevated with no guarantees that economic growth could accelerate further. Meanwhile, local media reported that today, the country’s president met the prime-minister and other government officials to discuss the 2026-2028 republican budget. We possess no numbers that could hint at the shape of the future budget, but most likely these numbers will be published soon. Once it happens, we’ll be able to have a more detailed look at current and expected fiscal trends.

Now read on...

Register to sample a report

Register