Kazakhstan macro: government amends 2023 budget but not as much as in 2022

KAZAKHSTAN - Report 30 May 2023 by Evgeny Gavrilenkov

In April, the Kazakh government amended both local and republican budget expenditures as it raised the revenue outlook for this year. The country’s Ministry of Finance recently published budget execution statistics for 4M23, which looked decent even though the tax collection of the republican budget lagged behind the monthly plan—the amended one. The ministry also published budgetary statistics for the consolidated local budgets and for what is called the “state budget,” i.e., the combination of these two. The republican budget is the largest segment of the Kazakh government finances and it operates as an intermediary when allocating transfers that come from the National Fund. More than half of the revenues of the combined local budget come as transfers from the republican budget. The latter, in turn, receives transfers from the National Fund.

A detailed look at the budgetary performance for all segments confirms that the Kazakh economy appears stable as the tax base expands—particularly on the local level, where income tax flow significantly exceeded expectations. The economic recovery in the country appears to be broad-based. One can expect that tax collection will remain reasonably strong later this year as inflation in Kazakhstan will likely remain elevated—it may still be above 10% by year-end, which will broaden the nominal tax base.

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