Fiscal problems do not start only when money is scarce. They can also build during a revenue boom. Governments may use temporary income to fund new spending. Those commitments can last for years.
Ireland offers a useful lesson. Strong budget figures do not always reveal the full picture. For Kazakhstan, Ireland is not a model to copy. Instead, it raises a key question: how much volatile revenue can safely support permanent spending?
Strong indicators, a vulnerable revenue base
The OECD reviewed the Irish Fiscal Advisory Council in 2026. It noted that Ireland’s fiscal position had improved. The economy grew. The budget remained in surplus. Public debt fell as a share of GDP.
At the same time, unusually high corporation tax receipts supported that position. However, their long-term reliability is uncertain. These receipts depend on a small number of large companies. They are also exposed to changing international conditions.
This does not make a surplus or low debt unreliable by itself. Still, budget analysis should look beyond current results. It should also examine the revenue base behind them.
What can and cannot – be compared with Kazakhstan
Ireland and Kazakhstan have different economic structures. Ireland faces concentrated corporation tax receipts. Kazakhstan relies in part on oil revenue and transfers from the National Fund.
So the countries should not be compared directly. Yet they share one fiscal risk. Volatile income can support spending commitments that last much longer.
Kazakhstan’s approved republican budget for 2026 sets the deficit at 2.5% of GDP. It sets the non-oil deficit at 4.9% of GDP. The guaranteed transfer from the National Fund is KZT 2.77 trillion.
These are planned figures. They are not actual budget results. Even so, they show why analysts should look beyond the headline deficit. They should also assess the budget without specified oil-related support.
The non-oil deficit measures the gap between budget receipts and spending. The calculation excludes oil-related items and National Fund transfers under the applicable methodology. This measure helps assess the budget’s exposure to oil revenue.
However, it does not show the whole fiscal picture. It cannot replace analysis of public debt, Fund assets, long-term commitments or actual budget execution.
Image generated using AI
Test several scenarios, not one forecast
Budget assumptions may look reasonable on their own. These include oil prices, economic growth and tax receipts. But several assumptions can miss at the same time. The risk grows once spending has been approved.
Therefore, policymakers should test alternatives alongside the baseline. What if oil revenue falls? How would transfers and the non-oil deficit change? Which expenses would be hard to cut quickly? What would happen to borrowing and public assets?
These questions form scenario analysis. They do not predict a specific crisis. Instead, they test how the budget could respond to different conditions.
Independent fiscal institutions can perform this scrutiny. They assess budget assumptions and compliance with fiscal rules. They also identify risks and explain them to the public. Ireland’s Council does not make budget decisions. Nor does it replace an audit.
The OECD also identifies limits to the Council’s work. Some public data arrive late or lack detail. As a result, the Council’s analysis can be constrained.
For Kazakhstan, this points to a possible independent assessment function. It does not automatically call for a new institution. Any such function would need a clear mandate and independence. It would also need timely access to complete budget data.
Moreover, its analysis should extend beyond the annual republican budget. It should cover medium-term assumptions, long-term commitments and quasi-fiscal risks. It should also examine how spending relates to oil revenue.
What public budget monitoring should show
Detailed analysis can be paired with a short public monitor. It could report planned and actual revenue and spending. It could also track the non-oil deficit, National Fund transfers and public debt. Deviations from the medium-term plan should be clear as well.
Colour coding can help explain pre-set thresholds. However, the thresholds and methods must be public. Otherwise, a green, yellow or red signal may lack a verifiable basis.
Image generated using AI
Sustainability is not tested only at the revenue peak
The National Fund saves part of Kazakhstan’s oil income. It also supports the budget through transfers. Therefore, the size of its assets is only one part of the picture. Analysts should also assess how much current spending depends on these receipts. They should compare commitments with a sustainable revenue base.
Ireland does not offer Kazakhstan a ready-made solution. Instead, it suggests a useful test. Could the budget meet its commitments if revenue weakened? Could it do so without abrupt changes to spending, taxes or borrowing?
Answering these questions requires several oil-revenue scenarios. It also requires a clear medium-term spending path. Long-term commitments should be counted. Budget assumptions should receive independent public scrutiny.
A budget is not tested only when revenue is rising. Its resilience also depends on whether the government can meet commitments as external conditions change.
Sultan Valikhanov, EconomyKZ Research expert, exclusively for EconomyKZ.org
