Adil Zhubanov, a member of Kazakh Parliament has raised concerns that Kazakhstan's state budget may face default if the current pace of public debt growth persists, KazTAG reports.
Zhubanov noted the rapid increase in public debt compared to national GDP, with debt growing at 28% annually over the past 15 years, outpacing the 15% average annual GDP growth. Without corrective measures, Zhubanov warned of the potential for a technical default. As of July 1, 2023, the government's debt stood at $61.7bn, and projections indicate that servicing this debt will constitute 14% of the total budget by 2026, escalating to 49% of the national GDP by 2030.
The Ministry of Finance reported Kazakhstan's public debt at $63.1bn or 24.4% of GDP as of October 1, with $54.6bn (86.4% government-owned), $6.1bn held by the National Bank, and $2.3bn owed by local executive bodies. The composition of Kazakhstan's public debt includes external (controlled by non-resident holders) and internal (owned by residents) components.
A government default on liabilities could impact Kazakhstan's sovereign rating, although modern economic science doesn't recognize the term "budget default." Governments can borrow or use reserves, and in Kazakhstan, funds are typically accessed from the National Fund.
Follow Daryo's official Instagram and Twitter pages to keep current on world news.
Comments (0)