Kazakhstan macro: The strong budgetary performance seen in 5M22 is likely to persist in 2022 as a whole

KAZAKHSTAN - Report 28 Jun 2022 by Evgeny Gavrilenkov and Alexander Kudrin

Given that the Kazakh economy performed relatively well in 5M22 as industry, construction, transportation and storage sector, trade, and communications were up by 4.4%, 8.9%, 8.1%, 10.8%, and 7.2% y-o-y, respectively, the budget execution numbers looked encouraging as well. Note that there were still uneven pandemic-related base effects. Still, the so-called short-term indicator, whose growth rate may be considered a proxy for economic growth overall, posted 5.9% y-o-y growth in 5M22. Meanwhile, GDP grew by 4.4% y-o-y in 1Q22.

Overall, the economic situation in Kazakhstan looked all right in 5M22, and the only unpleasant issue was high inflation, which accelerated to 14% y-o-y. However, combined with high oil prices, it was a sort of booster for budgetary revenue flows.

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