Kazakhstan macro: seemingly slow growth amid decent budgetary performance
While looking at some weather forecast websites, it is not unusual to see that in addition to the current temperatures, one may read that the weather “feels like” it is somewhat cooler or hotter – depending on various conditions, such as the strength and direction of the wind or the level of humidity. Similarly, while looking at Kazakhstan’s statistics, it is hard to avoid the temptation to add “feels like”, as the country’s economic statistics are not immune from internal inconsistencies. The official numbers suggest that in 9M22, GDP was up by 2.8% y-o-y, and in 10M22, the short-term indicator, which captures economic activity monthly, grew by 3.1% y-o-y. Nominal GDP reached KZT 64.6 trillion in 9M22, i.e., just over $140 bn, and by year-end, it could be around $190 bn, as said above. The trends point to a deceleration of economic growth. However, it feels like the Kazakh economic dynamics could be much better quite soon — at least in the non-oil-and-gas sector, which faced several disruptions (such as maintenance work on oil fields, problems with CPC, etc.).
The budget execution statistics indicate that revenue collection in the country remains relatively strong, including in the non-oil and gas sector. Even though the oil-and-gas industry was negatively affected by several issues that emerged this year, the high oil price and weakened tenge helped to collect additional revenues in local currency. Therefore, the Kazakh government, having amended the 2022 expenditures of the republican budget by 15.1%, also amended the revenue plan (by 21.9%). The consensus suggests that in 2023 Kazakh economic growth will accelerate, and the deficits will be smaller as the government has no plans to inflate expenditures as much as it did this year.
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