Kazakhstan’s government wants more money from the National Fund

The government has decided to withdraw more funds, equivalent to $2 billion, from the National Fund in addition to the $7.4 billion already scheduled for withdrawal this year. This plan was revealed by Chair of the National Bank Timur Suleimenov.

«The cabinet has requested $4 billion. The target transfer was planned at $3.3 billion, but it is now going to be $7.4 billion. This transfer is outside the fiscal rule perimeter. I mean, a guaranteed transfer is limited by the budget code, whereas a target transfer has no limitations,» Suleimenov said.

Under the budget law, the cabinet was supposed to withdraw no more than $7.4 billion from the National Fund through guaranteed transfers ($4 billion) and targeted transfers ($3.3 billion).

According to Suleimenov, the guaranteed transfer is capped and cannot exceed $4 billion under the budget law. Now, the National Bank wants the cabinet to include the targeted transfer within the fiscal rule perimeter to prevent situations where this transfer might be increased during the year. The head of the central bank is unsure how the cabinet will respond to this initiative.

As of Oct. 1, 2024, according to the Ministry of Finance, the government had used about $4 billion in guaranteed transfers and more than $4 billion in targeted transfers. This means that the authorities have withdrawn $825 million more than initially planned from the National Fund. To meet the plan, the cabinet will need to cut an equivalent amount from the remaining $4 billion and withdraw only $3.2 billion in the last three months of the year.

Kazakhstani authorities use guaranteed transfers from the National Fund to cover the budget deficit. Targeted transfers from the National Fund are typically allocated to finance various anti-crisis programs during economic downturns, important nationwide projects and key infrastructural projects by presidential decision when no alternative funding sources are available.

As of Sept. 1, the budget deficit exceeded $5.7 billion, significantly more than the expected $4.3 billion threshold. Fiscal authorities attribute this to lower-than-expected tax collections ($15 billion instead of $19.8 billion), the Finance Ministry reported. The shortfall affected both corporate income tax and value-added tax collections.

As of Oct. 1, the National Fund reported $64.5 billion in assets (up from $61.4 billion in January 2024). The fund received $11.3 billion and disbursed $8.2 billion by that date.