As of the first half of 2024 the deficit of the republican budget amounted to 1,9 trillion tenge, which is equivalent to 3,7% of GDP.
For reference: the revenues of the republican budget for the first half of 2024 amounted to 87 trillion tenge, while expenditures reached 106 trillion tenge.
On a positive note, the budget deficit for the first half of 2024 decreased by 18,3%, or by 425,5 billion tenge, compared to the same period in 2023. It is also notable that the average monthly growth rate of the deficit in the first half of 2024 was 49%, whereas, in the same period in 2023, this figure reached 85,6%. Thus, although the absolute amount of the budget deficit remains significant, its relative indicators show much more positive dynamics compared to the previous year.
By the end of the first half of the year, the government had already used almost the entire planned volume of transfers from the National Fund—3 trillion tenge out of a possible 3,6 trillion tenge. This indicates that the government may be forced to either increase transfers from the National Fund or significantly raise the republican budget deficit, which could negatively affect the debt servicing indicators in the future.
In some cases, a deficit can be beneficial for stimulating the economy. For example, during an economic downturn the government can increase spending on infrastructure projects, social programs, and business support to create jobs and stimulate growth.
Both a budget deficit and surplus can exist, but a surplus does not always indicate the correct economic course. If we compare a country’s economy to a household budget, a surplus allows households to save for the future or a vacation. However, it is essential to consider whether the household is also taking care of health and improving living conditions.
The problem with a surplus is that if timely issues, such as health care or home maintenance, are not addressed, they accumulate and will eventually require more substantial financial investment. Another important factor is inflation. For example, in early 2015, no one expected a sharp depreciation of the national currency, which led to many people who kept their savings in cash or deposits losing half of their savings by early 2016.
At the national level, a surplus in the republican budget can indicate that a large amount of money is not being utilized in the economy, which could lead to long-term stagnation.
By Toqtasyn Bakbergen
