GDP growth and inflation reduction: Government approves draft national budget for 2023-2025

The forecast of social and economic development of Kazakhstan for 2023-2027 and draft laws on formation of the national budget for 2023-2025 were considered at the Government session chaired by Prime Minister Alikhan Smailov.

The Minister of National Economy Alibek Kuantyrov reported that the forecast of socio-economic development has been formed taking into account the final data on economic growth in 2021, expectations of international financial organizations on the growth of the world economy and prices for export commodities.

In the basic scenario, which is used as a basis for budget planning, the average oil price is laid at $ 85 per barrel, and the estimated dollar exchange rate is at 470 tenge. The average annual real GDP of Kazakhstan under this scenario will be 3.9%, including 4% in 2023. Exports and all major sectors of the economy are expected to grow.

In turn, Deputy Chairman of the National Bank Akylzhan Baimagambetov said that the target corridor of annual inflation in 2023 is projected in the range of 7.5-9.5%.

Deputy Prime Minister, Minister of Finance Yerulan Zhamaubayev presented data on the draft national budget for 2023-2025.

Thus, the revenues for 2023 are projected at the level of 17.8 trillion tg, a guaranteed transfer from the National Fund will be attracted in the amount of 2.2 trillion tg with a decline of 1.8 times compared to the current year.

Expenditures in 2023 are planned in the amount of 21 trillion tn with an increase of 2.2 trillion tn, and their main share falls on the social sphere. To support the development of the real economy 2.1 trillion tg is planned.

Having listened to the speakers, the Prime Minister noted that the submitted draft national budget for the three-year period is primarily aimed at the full and timely implementation of all social obligations of the state, as well as ensuring the quality and sustainable development of the economy in the current environment.

"The growth of gross domestic product in 2023-2025 is projected at 4-4.1%. The average annual inflation rate is planned to decrease to 3-4% by 2025. Revenues of the national budget in 2023 will increase by 3 trillion tenge. Thus we provide a high level of growth rate of own revenues of the republican budget," Alikhan Smailov said.

The Head of Government stressed that transfers from the National Fund will be significantly reduced: by 1.4 trillion tenge in 2023, by another 800 billion tenge in 2024 and by 500 billion tenge in 2025.

"This is a very important aspect. The guaranteed transfer will not exceed the amount of revenues to the National Fund from the oil sector. And the growth of budget expenditures will not exceed the average level of long-term economic growth, taking into account the inflation target. In general, the draft budget is balanced," the Prime Minister said.

Alikhan Smailov also added that the budget is social. So, 8 trillion tg is provided for this sphere in 2023.

At the same time, the development of manufacturing industry, business support, development of transport infrastructure and gasification remain priorities in the real sector of the economy.

"We are faced with the task of using budget funds as efficiently as possible," concluded the Prime Minister.

After the voting procedure for the submitted bills, the Prime Minister instructed the Ministries of National Economy and of Finance together with the Office of the Prime Minister to ensure their submission to the Parliament together with the forecast of social and economic development.

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