Economic Outline

Economic Indicators

Kazakhstan's economic growth is largely based on gas and oil revenues, accounting for around 35% of GDP and 75% of exports. After reaching 5.1% in 2023, Kazakhstan’s economic growth remained strong in 2024, though it slowed to 3.9% from 5.1% in 2023, largely due to flat oil production partly compensated by a broad-based non-oil growth, according to the IMF. Growth is projected to reach 5% in 2025, driven by the expansion of the Tengiz oil field and continued strong public spending. However, without accelerated reform implementation, medium-term growth is expected to remain at its estimated potential of 3-3.5%. External risks include a slowdown in major economies due to supply disruptions or renewed inflation, intensified regional conflicts, secondary sanctions, and higher commodity price volatility or oil pipeline disruptions.

In December 2024, Kazakhstan's Senate approved amendments to the 2024 budget, raising the deficit from 2.6% to 2.7% of GDP. Planned revenues were revised to KZT 14.1 trillion, down 12% or KZT 2 trillion from the original estimate, while expenditures increased by 0.4% to KZT 24 trillion. The budget deficit rose from KZT 3.5 trillion to KZT 3.6 trillion. Revenue was lowered due to reduced oil production, a significant increase in VAT refunds for 2023 amounting to KZT 594 billion, and unstable external factors, such as global commodity price volatility and logistics challenges faced by major companies. The 2025 draft budget envisages continued subdued tax revenues, higher spending, and National Fund transfers amounting to about 3.9% of GDP. Although increasing (to 24.8% in 2024), Kazakhstan's public debt remains low, with significant financial assets accumulated in the National Fund (about 23% of GDP at the end of 2023). The government plans to meet the majority of its financing needs through 2026 in the domestic market, supported by ample banking sector liquidity, relatively weak loan demand, and high return on equity (IMF). The National Bank of Kazakhstan has maintained a cautious monetary policy amid ongoing inflation pressures from higher energy tariffs and fiscal underperformance. Inflation was estimated at 8.2% in 2024, still above the 5% target, as disinflation slowed due to rising domestic energy tariffs and an expansionary fiscal policy.

The unemployment rate stood at around 4.6% in Q4/2024. To improve living standards, the government implemented a 21.4% nominal increase in the minimum wage, effectively doubling it since 2021 (+70% rise in real terms). According to the World Bank, poverty, estimated at 7.9% (at USD 6.85/day) in 2024, is expected to decrease to 6.7% in 2025 and 6.1% in 2026 as growth continues and inflation subsides.

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