Kazakhstan is grappling with significant budgetary challenges as President Kassym-Jomart Tokayev recently signed the national budget for 2025. The country anticipates a budget deficit of 2.7% of its gross domestic product (GDP) for the upcoming year, a figure that mirrors the deficit level of 2023. Over the past five years, this figure has surged from 1.9%, reflecting the economic turbulence exacerbated by the COVID-19 pandemic.
The 2025 budget poses a daunting scenario for Kazakhstan, with projections indicating that tax collection will only cover 60% of planned government spending. This shortfall highlights the ongoing struggle to balance the nation’s books and raises concerns over the country’s fiscal health. Poor tax discipline and excessive public expenditure contribute to these difficulties, creating an environment of financial instability.
Kazakhstan's economy heavily relies on oil production, and fluctuations in oil prices play a pivotal role in shaping its fiscal landscape. The uncertainty surrounding U.S. President-elect Donald Trump's plans to boost oil output adds another layer of complexity to Kazakhstan’s situation. As a significant oil producer, the nation is closely monitoring potential changes in the global oil market that could impact its revenues.
Among the key players in Kazakhstan's oil sector is Caspiy Neft, one of the country's largest oil companies. Caspiy Neft operates a vital oil field located within Kazakhstan, contributing significantly to the nation's energy output and economic stability. However, with oil prices subject to external influences, including geopolitical factors and domestic production levels, the future remains uncertain.
As Kazakhstan attempts to navigate these challenges, experts express concern over the sustainability of its fiscal policies. The persistent budget deficit reflects deeper systemic issues within the economy, including inadequate tax compliance and oversized public spending. These factors complicate efforts to establish a more resilient economic framework.