Kazakhstan macro: high oil prices to support revenue flow for the rest of the year
On August 27, Kazakhstan’s Deputy Prime Minister Zhamaubaev presented a draft law on the Republican budget for 2023-2025. Mr. Zhamaubaev mentioned that republican budget revenues are expected at KZT 17.8 trln next year while expenditures should reach KZT 21.0 trln. Hence the deficit is expected to be at KZT 3.2 trln. These numbers do not look unreasonable, even though revenues are expected to be 13.6% higher than amended adjusted revenues expected this year. Expenditures next year will grow by 12.6% relative to this year’s expenditures, which were amended earlier.
Kazakhstan’s fiscal performance looks solid this year despite the amended expenditures earlier this year. The country has enough flexibility to redirect flows between various parts of the budgetary system in the case of future shocks. As the dependence of the Kazakh budget on revenues from the oil and gas sector is still high, the country’s government will continue pursuing a policy aimed at diversifying its revenues and encouraging more foreign businesses to come into the country. Last week, Kazakh officials announced that they were talking with 250 Western companies that left Russia to relocate their operations to Kazakhstan. If this happens, and the same trend continues for years, the country's tax base will gradually broaden.
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