Kazakhstan Macro: the budget is in surplus in 1Q22 as revenues exceed the plan

RUSSIA ECONOMICS - In Brief 26 Apr 2022 by Alexander Kudrin

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The consolidated budget of the Republic of Kazakhstan posted a surplus in 1Q22, as the country’s finance ministry reported. This budget is a sum of the state budget and the National fund net of transfer from the latter to the former (the state budget is an aggregate of the republican and local budgets).In 1Q22, the revenues of the consolidated budget reached KZT4.820 trln, i.e., 30.7% of the annual plan to collect KZT 15.711 trln, which was well ahead of the target if to assume an even flow of revenues by months. The Kazakh government spent KZT4.402 trln in 1Q22, while the annual plan suggests KZT19.061 to be spent in 2022. Spending about 23.1% of the annual target looks well in line with even allocation of expenditures during the year.The National fund accumulated KZT1.051 trln in revenues in 1Q22, i.e., 41.6% of the annual target (KZT2.529 trln). This amount is almost comparable with the transfer to the state budget. As the oil price is likely to stay elevated in the rest of the year, the Kazakh consolidated budget could have remained in surplus if the government had not decided to amend expenditures of the republican budget and raise them by KZT2.7 tln. Overall, despite the plan to increase spending, the consolidated budget is likely to post a smaller deficit than the initial unamended one, which was set at around KZT1.350 trln. The National fund will most likely collect over KZT4.1 trln this year, implying the possibility to increase the transfer to the republican and local budgets. At the same time, high inflation will help budgets of all levels collect additional revenues not related to oil.Meanwhile, the 12% y-o-y inflation seen in March prompted the National ba...