Budgets of various levels perform differently in 4M25 - subject to revenue sources

KAZAKHSTAN - In Brief 20 May 2025 by Evgeny Gavrilenkov

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As the Kazakh economy reportedly posted strong growth in 4M25, as the short-term indicator (a monthly proxy of economic activity in six key sectors of the country’s economy) was up by 8.5% y-o-y, budget revenues in various segments of the budgetary system were reasonably strong. Meanwhile, a few days ago, the Bureau of National Statistics reported that the Kazakh GDP grew by 5.6% y-o-y in 1Q25 (the short-term indicator increased by 8.3% y-o-y over the same period). Even though more detailed sectoral statistics are internally inconsistent and a complete set of m-o-m, y-o-y, and cumulative y-o-y growth numbers is unavailable in some cases, and verifying the published data is next to impossible, budgetary statistics supports the view that the economy remains not in bad shape. For instance, local budget tax revenues accounted for 40.1% of the annual target in 4M25. Total revenues accounted for 34.1% of the yearly target because transfers from other levels of the budgetary system (as part of total revenues) lagged. Similar to the previous year, due to a strong tax revenue flow, there was no need for transfers in the amounts as was budgeted. The history repeated itself also on the expenditure side of the local budgets as they were already upwardly amended by over KZT0.9 trln (expenditures now stand at KZT15.9 trln, and in 4M25, the government financed 27.3% of the new target). As a result, local budgets appeared in a surplus of nearly KZT0.9 trln, while the 2025 amended plan assumes a deficit of nearly KZT1.0 deficit (the initial version of the budget assumed a KZT0.3 trln deficit this year). Strong revenue flow of the local budgets that doesn’t depend much on the oil price ...