A Review of Fiscal Policy (1 half-year 2022)

Main conclusions


High energy prices ensured a 77% increase in tax revenues compared to last year	A quarter of budget revenues are transfers from the National Fund, which increased by 15% in the first half of the year


The execution of the plan for tax revenues to the National Fund in the first half of the year amounted to 79.3%	The largest revenue growth is observed in Almaty, Shymkent and Atyrau regions. The largest expenditure growth is noted in Almaty region, Almaty city and the capital


The share of transfers to local budgets is on average half of the income. In some areas, the share exceeds 70%	The bulk of expenditures comes to education, social assistance and security, while there is an increase in defense expenditures


Kazakhstan’s public debt continues to grow. 725.2 billion tenge has been allocated from the state budget for debt servicing, which is significantly more than in previous years	The political and economic situation that has developed due to the conflict between Russia and Ukraine, and the global monetary tightening harms the fiscal policy of Kazakhstan and leads to the need to revise the budget constantly


The basic risk to the budget of Kazakhstan is still its high dependence on the oil and gas sector. At the same time, many existing state programs and national projects indicate that the budget expenditure will only grow	The government should not delay the transition to a countercyclical policy of budget planning in the face of external threats of inflation and pricing pressure

Risks and prospects

The political and economic situation that has developed due to the conflict between Russia and Ukraine and the global monetary tightening harms the country’s fiscal policy and requires constant budget revision.

The government increases guaranteed transfers from the National Fund every time and support the budget, while there is a continuing increase in the non-oil deficit. This leads to economic instability and indicates significant risks for maintaining fiscal stability.

In our opinion, the basic risk to the budget of Kazakhstan is still its high dependence on the oil and gas sector.

The current budget surplus is formed only hence price surge of energy prices.

At the same time, many existing state programs indicate that the expenditure budget will only grow. And the efficiency of the allocation and use of budget funds remains controversial.

Thus, the government should not delay the transition to a countercyclical policy of budget planning in the face of external threats of inflation and pricing pressure.