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State budget revenue execution deteriorated as tax revenue shortfalls widened. In January-July 2026, revenue execution stood at 97.1% of the plan, compared with 99.0% in January-June 2026. The execution rate for the republican budget fell from 100.7% to 99.0%, while that for local budgets declined from 97.4% to 96.2%. The main factor was the persistent shortfall in tax revenues relative to forecasts, with weaker performance across all major taxes. Against this backdrop, the state budget deficit reached KZT 3.1 trillion, double the level recorded in the same period of 2025.
Nevertheless, taxes are playing an increasingly important role in budget revenues. In January-July 2026, tax revenues increased by 29.1% (YoY), while transfers declined by 27.1% (YoY). As a result, the share of taxes in state budget revenue rose to 82%. At the same time, the tax revenue shortfall may indicate that expectations for additional revenues associated with the tax reform were overly optimistic. In turn, the reduction in the budget’s dependence on oil revenues may prove temporary and could be followed by another increase in withdrawals from the National Fund.
The National Fund’s foreign-currency assets resumed growth. At the end of July, they stood at USD 66.1 billion, up by 3.5% since the beginning of the year. The increase in July was driven primarily by inflows exceeding withdrawals from the Fund, while changes in the value of the foreign-currency portfolio remained the main factor behind asset dynamics over the first seven months of the year.
Economic growth slowed somewhat amid the continued downturn in the mining sector. The short-term economic indicator for January-July 2026 stood at 104.9%, compared with 105.1% in January-June 2026. Production of oil, natural gas, copper and iron ore remained below year-earlier levels, while manufacturing growth slowed from 9.8% (YoY) to 9.0% (YoY). At the same time, construction maintained a high growth rate of 15.3%, while trade and passenger transportation continued to show positive momentum.
The decline in oil production brought Kazakhstan closer to meeting its OPEC+ commitments. In July, oil and gas condensate production fell to 7.6 million tonnes from 8.6 million tonnes in June 2026 amid attacks on tankers near the CPC marine terminal. At the same time, OPEC+ suspended further quota increases, leaving Kazakhstan’s October target unchanged at 1.628 million bpd.
Investment growth slowed amid a further reduction in budget financing. Fixed capital investment increased by 7.7% (YoY) in real terms in January-July 2026, compared with 9.6% (YoY) in the first half of the year. Enterprises’ own funds remained the main source of investment, accounting for 67.8%, while the role of bank lending and other borrowed funds is gradually increasing. By contrast, investment financed from the state budget fell by 27.8%, making a negative contribution of 3.1 percentage points to overall investment growth.
Foreign trade accelerated on the back of a sharp increase in exports in June. Total exports reached USD 10.0 billion in June, compared with USD 6.4 billion in May, while the value of crude oil shipments rose from USD 2.8 billion to USD 5.2 billion. The main driver was the March increase in global oil prices amid the military conflict in the Middle East, which was reflected in foreign trade statistics with a lag of approximately three months.
Read more in the Socio-Economic Development Review.
