The 2023-2025 rolling budget gets shaped

KAZAKHSTAN - In Brief 21 Oct 2022 by Alexander Kudrin

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The Deputy Finance Minister Mr. Birzhanov, presented in Kazakhstan’s Parliament the 2023 republican budget, along with its projections for 2024-2025. Revenues should reach KZT18.8 trillion in 2023, i.e., over KZT2.0 trillion above revenue expected in 2022. These revenues include the so-called guaranteed and targeted transfers from the National Fund. These two combined will account for KZT3.2 trillion, i.e., well below this year’s planned total transfers, equal to KZT 5.5 trillion. Meanwhile, one cannot rule out that actual transfers may be slightly lower this year, as high inflation can contribute to additional revenues this year. The expenditures of the republican budget will rise to KZT 2.1 trillion in 2023 (from a planned KZT 18.8 trillion in 2022). In nominal terms, the budget deficit in 2023 should be more or less the same as in 2022, while it should decline as a percentage of GDP as the nominal GDP should increase. This year, the government expects the republican budget to stay around 3.3% of GDP. In 2025, the government expects it to gradually de to 2.5% of the GDP. The country’s high inflation broadens the nominal tax base associated with non-oil revenues. Therefore, it is unsurprising that the Kazakh government expects the share of non-oil revenues in the republican budget to rise from 59.8% of GDP in 2022 to 78.2% in 2025. Ongoing diversification of the economy will also help to make the budget depend less on the oil sector. Evgeny Gavrilenkov Alexander Kudrin