Page 17 - Kazakh Outlook 2022

5.0 Fiscal policy outlook

Kazakhstan’s budget deficit is forecast to gradually decline from 3.3%
of GDP in 2022 to 2.5% of GDP in 2024, according to official figures
cited by Minister of Finance Erulan Zhamaubayev at a government
briefing on the budget plan for the 2022-2024 period.

Budget expenditures in 2022 are planned at KZT15.9tn ($37.4bn), the
minister said.

Budget revenues for 2022 are projected at KZT13tn ($30.6bn), which
would surpass the budget projections for 2021 by KZT431bn ($1bn).

The growth of non-oil and gas revenues in 2022 is projected at
KZT1.8tn ($4.2bn).

Guaranteed transfers from Kazakhstan’s rainy day National Fund to the
budget are planned at KZT2.4tn tenge ($5.6bn) in 2022 with a planned
decrease to KZT2tn ($4.7tn) by 2024.

6.0 Markets outlook

6.1 Currency

The trajectory of the tenge is likely to continue moving relative to the
Russian ruble in 2022, just as it historically has. The strength of the
Kazakh currency is likely to be positively influenced by the recovery in
demand for oil and growing oil prices expected in 2022 amid the
recovery from effects of the pandemic.

“Tenge flexibility allowed Kazakhstan to absorb oil price volatility in
2020 while preserving external reserves. The tenge has moved broadly
in line with the Russian rouble, remaining weak relative to rallying oil
prices in recent months due to a surge in imports as consumption
demand rebounded with recovering economic activity,” Fitch said in a
note.

“The authorities engaged in direct FX interventions during periods of
heightened currency volatility in 2020, and the NBK is an active
participant in the FX market in its management of the NFRK's
conversion of FX assets for state budget financing transfers,” the
ratings agency added.

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