Kazakhstan’s 2022 republican budget deficit smaller than planned

KAZAKHSTAN - In Brief 25 Jan 2023 by Alexander Kudrin

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The Ministry of Finance reported that in 2022 the republican budget posted a smaller deficit than was stipulated by the amended target. This deficit accounted for KZT2.4 trln ($5.2 bn) instead of KZT3.0 trln ($6.5 bn). Own tax revenues of the republican budget exceeded the amended plan by 2.1% and exceeded KZT10.0 trln ($21.8 bn), while transfers from the National Fund accounted for KZT5.5 trln ($11.9 bn). Other revenues of the republican budget, such as non-tax ones, also exceeded expectations (nearly 28%). As a result, total revenues approached KZT 16.0 trln and exceeded the amended target by KZT 0.3 trln. Revenues of the National Fund exceeded the 2022 target by nearly 65% (in KZT terms), which enabled the financing of the massively amended expenditures. As the KZT weakened against the USD in 2022 (by around 8% on an average annual basis relative to 2021), revenue flow to the fund was less impressive but still well above the plan. Even though the consolidated budget (budgets of all levels combined with National Fund and state social funds net of mutual transfers) was in deficit, this deficit resulted from losses of the Fund’s management. These losses reached nearly KZT1.4 trillion or around $3.0-3.1bn - depending on the exchange rate (such as average annual or average for the particular period when losses were made). As a result of all transactions, the National Wealth Fund reached KZT28.6 trillion and increased by KZT0.6 trillion in 2022 (i.e., by 2.1%), while due to valuation effects it contracted in dollar terms from over $6.4 bn as of January 1, 2022, to $6.2 bn as of January 1, 2023. In 2023, the Kazakh government plans to accumulate KZT17.5 trillion in the rep...