Page 15 - Kazakh Outlook 2025

observers have expressed concern about the rising non-oil deficit and its potential risks.
The IMF has noted that Kazakhstan's non-oil deficit path has been higher than suggested by long-term benchmarks, necessitating adjustments to avoid fiscal sustainability risks and to promote intergenerational equity. The European Bank for Reconstruction and Development (EBRD) has noted that Kazakhstan’s non-oil deficit comes with fiscal risks amid a global transition away from fossil fuels, given that oil accounts for roughly 50% of exports and is a major source of government revenue.
The IMF, as mentioned before, is concerned about Kazakhstan’s overreliance on National Fund withdrawals to cover the budget gap, as the practice only justifies the budget deficit and its ongoing expansion. In the January-October period of 2024, the Kazakh authorities withdrew $8.17bn from the National Fund. The new budget plan expects that the government will withdraw KZT5.25 trillion (or approximately $10.1bn) in 2025.
The IMF has suggested reforms to improve the effectiveness of Kazakhstan's monetary policy, including enhancing the independence of the National Bank and improving tax collection, which could add $8.3bn to the treasury.
The value of the National Fund’s assets surpassed $69.3bn in late September, continuing a trend of growth seen since May.
Ardak Tengebayev, a member of the Supreme Audit Chamber, has expressed concern over the rapid growth of public debt, which has increased by an average of 12% annually over the past five years, closely tracking GDP growth. As of October 1, Kazakhstan's total public debt was reported at over KZT30.5 trillion or 22.6% of GDP.
Both indicators are likely to grow further in 2025, especially given the government's plans to continue ramping up spending as the country continues to combat the indirect consequences of the war in Ukraine and international sanctions against Russia.
15 Kazakhstan Outlook 2025 www.intellinews.com