Kazakhstan is preparing for a new budget cycle with a focus on accelerating the construction of infrastructure and social facilities. In this article El.kz examines where public resources may be allocated and what is already known about the projects planned for the coming period.
What the President said
On 23 August, Kassym-Jomart Tokayev said that the country was facing numerous challenges and effectively announced plans to turn Kazakhstan into a major nationwide construction site, with a particular focus on social facilities for citizens. Several days later, speaking at the opening of the first session of the Kurultai, he noted that large-scale construction would require substantial public investment.
The programme is expected to cover all regional centres, districts and cities across the country. According to the President, priority will be given to projects with a long-term socio-economic impact, while one-off, narrowly targeted expenditures have been excluded from the list.
Where the money will come from
Earlier this year, the Government decided not to draw targeted transfers from the National Fund over the next three years. At the end of August, however, this decision was revised, and the amount of withdrawals from the Fund was increased by KZT 5 trln.
The funds will be allocated to social, municipal, energy and transport infrastructure. The National Bank stressed that the investments should generate domestic value added and provide regions with additional tax revenues. The targeted use of the funds is expected to be monitored, including through the use of the digital tenge.
What will be built
According to Kassym-Jomart Tokayev, Astana may see the construction of a new bridge, a Dombra Palace and a Water Resources Research Centre. In the regions, priority will be given to outpatient clinics and children’s rehabilitation centres, which are currently in short supply in many cities.
The President also specifically called for urban improvement and beautification programmes under the Taza Qazaqstan initiative to continue. The construction programme should cover not only new development sites on the outskirts of cities but also the renovation and upgrading of existing urban areas, including Almaty.
Economists expect growth, but with conditions
The Government expects Kazakhstan’s economy to grow by more than 5% annually, driven primarily by the construction sector.
Construction-sector growth is projected at 16–17% per year over the next three years, while growth in the extractive sector is expected to come to an almost complete standstill.
Economist Ruslan Sultanov believes that the construction cycle itself can support GDP growth. However, at the next stage, roads, utility networks and newly built facilities should begin to reduce business costs and attract private investment. In his view, the quality of this economic growth should ultimately be assessed by this multiplier effect.
What economists are focusing on
Financier Rasul Rysmambetov believes that large-scale public investment should focus on projects capable of generating sufficient returns and covering their own operating and maintenance costs once commissioned. He advocates implementing such projects under transparent budget arrangements, with clear requirements for contractors and demonstrable benefits for local residents.
Economists also recommend taking into account differences in the pace at which funds are absorbed across regions and planning the allocation of projects in advance so that new infrastructure contributes to the development of all regions of the country.
At the same time, the role of bank lending in the construction sector is growing. For this reason, experts consider the question of where the funds are being allocated to be no less important than the question of how much funding is being provided.
