Tax revenues and budgetary spending lag behind amid widening deficit

KAZAKHSTAN - In Brief 23 Jul 2024 by Evgeny Gavrilenkov

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The Ministry of Finance published budget execution statistics for 1H24, and the data show that despite delayed spending, deficits of the consolidated and republican budgets are widening amid suppressed tax revenues. Excessively strong tenge still drags the latter. In 1H24, the consolidated budget deficit (republican, local, state extra-budgetary funds, and the National Fund altogether net of mutual transfers) exceeded KZT1.0 trln. The 2024 full-year target is KZT691 bln. Total revenues amounted to nearly KZT 12.1 trln (41.6% of the 2024 plan), and expenditures reached KZT12.381 trln (43.9% of the annual target). Meanwhile, tax revenues amounted to 39.7% of the yearly plan. The republican budget deficit also widened in 1H24 as tax revenues climbed to a mere 32.9% of the annual plan. Total revenues reached 43.0% of the full-year target – mainly due to faster utilization of the budgeted transfers from the National Fund. The republican budget received over KZT 3.0 trln in transfers – mainly from the National Fund (a tiny amount came from budgets of lower levels). It was 74.9% of the annual budgeted amount. Republican budgetary spending reached KZT10.5 trln (44.8% of the 2024 plan), and the 1H24 underfinancing approached KZT1.3 trln. The republican budget deficit reached KZT1.9 trln in 1H24, while the yearly 2024 limit is KZT3.5 trln. Within a few days, we’ll try to dig into more details and attempt to envisage in the new report what kind of schemes could help the government raise more revenues this year. The tenge started weakening (having approached nearly USD/KZT 480), but it was not enough to secure more revenues. For smoother tax revenue flow, the tenge should have bee...