Kazakh government readies budget plans for $50 oil scenario

Kazakh Deputy Prime Minister and Minister of National Economy Serik Zhumangarin has said that the Kazakh government is preparing several budget optimisation scenarios in case of a significant drop in global oil prices, particularly if they fall to $55 or $50 per barrel.

Zhumangarin outlined these plans during a recent briefing at the Majilis, Kazakhstan’s lower house of parliament, Caliber.Az reports via Russian media.

He noted that there are three main scenarios under consideration. The current forecast is based on an oil price of $75 per barrel and an exchange rate of 470 tenge per $1. In addition to this, a crisis plan has been prepared for a scenario where oil prices fall to $60 per barrel. The government is also close to finalizing optimization plans for oil prices at $55 and $50 per barrel.

Zhumangarin emphasised that the government is already well aware of which budget expenditures will need to be reduced in case of a significant price drop.

Earlier this year, the Kazakh government approved a draft socio-economic development plan for 2025-2027. The plan includes three possible development scenarios that will be adjusted depending on external factors, with the baseline scenario assuming an oil price of $75 per barrel. 

The government had initially set the oil price at $80 per barrel when developing the republican budget for 2024-2026. With the potential for fluctuating global oil prices, these budgetary adjustments are aimed at maintaining fiscal stability. 

On April 9, the price of Brent crude fell below $59 per barrel for the first time since February 2021. The official exchange rate for April 9 stands at 518.57 tenge per $1.

By Naila Huseynova