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Kazakhstan

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Economic and political overview

Economic Overview

Kazakhstan's economic growth is largely based on gas and oil revenues, accounting for around 35% of GDP and 75% of exports. The estimated GDP growth for 2023 stood at 4.6%, fueled by growth in both the oil and non-oil sectors, with the impact of the conflict in Ukraine remaining contained. Strong credit growth has also supported activity. According to the IMF, anticipated growth in 2024 is projected to moderate within an uncertain economic climate, expected to slow to 3.1% primarily due to delays in the Tengiz oil field expansion. Over the medium term, non-oil GDP growth is set to stabilize at around 3.5%. Downside risks encompass potential oil price declines, disruptions in oil exports, and sluggish growth among trading partners. Additionally, spillovers from the conflict in Ukraine and geopolitical fragmentation, including secondary sanctions, pose threats to activity and investor confidence.

In 2023, the fiscal stance has loosened, witnessing notable rises in investment spending, particularly directed towards transport and energy infrastructure, alongside increased social spending. The consolidated budget deficit was estimated at 1% of GDP, with expected deficits of 1.3% this year and 1.1% in 2025 (IMF). As of 2023, the general government debt accounted for 23.4% of GDP, representing a credit strength. The IMF foresees the ratio to remain stable over the forecast horizon. The government's dedication to fiscal consolidation is encouraging and should be reinforced by adopting more conservative economic forecasts and implementing precise reform strategies. Achieving a reduction in the non-oil deficit to 5% of GDP by 2030 would bolster disinflation efforts and safeguard substantial fiscal reserves (IMF). Inflation, which reached its peak at 21% in February, decreased over the course of the year, averaging 15% by the conclusion of 2023. It is forecasted to gradually ease, reaching 6.7% by 2025.

Unemployment rate remained stable at 4.8% in 2023. The growth of real wages has stabilized after experiencing sharp increases over the past two years. According to IMF estimates, unemployment should remain stable over the projected period. The World Bank's Kazakhstan Economic Update estimates that the country's poverty rate has increased to 12-14% in 2022 from a baseline of 6% in 2016. The government has implemented a substantial amount of direct support to businesses through tax deferrals and subsidized loans, and financial support to poor households and affected individuals.

 
Main Indicators 2023 (E)2024 (E)2025 (E)2026 (E)2027 (E)
GDP (billions USD) 263.37292.55306.63325.47347.57
GDP (Constant Prices, Annual % Change) 5.13.55.54.13.6
GDP per Capita (USD) 13,26114,57015,11215,87416,784
General Government Balance (in % of GDP) -1.7-2.7-2.5-2.2-2.1
General Government Gross Debt (in % of GDP) 22.824.827.630.032.0
Inflation Rate (%) 14.68.67.26.35.4
Unemployment Rate (% of the Labour Force) 4.84.84.84.84.8
Current Account (billions USD) -8.73-4.49-8.29-10.03-10.96
Current Account (in % of GDP) -3.3-1.5-2.7-3.1-3.2

Source: IMF – World Economic Outlook Database , October 2021

Country Risk

See the country risk analysis provided by La Coface.

 

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Main Sectors of Industry

Kazakhstan benefits from multiple natural resources, including major deposits of oil, natural gas, coal, iron ore, manganese, chromium ore, nickel, cobalt, copper, lead, zinc, bauxite or uranium. The country also has a large agricultural area (ranked 14th world), composed of arable land and pastures. Agriculture suffered from a strong decline in the aftermath of the fall of the Soviet Union, but has recovered in the last 20 years. The sector accounts for 5.2% of GDP and employs 13% of the working population (World Bank latest data available). Agriculture in the country is extensive, but ageing infrastructure limits its development. More than half of the products are vegetable crops (cereals, including wheat, oilseeds, cucurbits). Kazakhstan is one of the world's leading wheat producers. Livestock and dairy industries account for a significant share of the agricultural sector. The country is almost self-sufficient in agri-food. According to governamental figures, in the first eleven months of 2023, the gross agricultural output totaled USD 17.8 billion. Significant yields comprised 16.6 million tons of grains, 2.1 million tons of oilseeds, and 5 million tons of forage crops, guaranteeing abundant provisions for the local market.

The Kazakh industry sector - accounting for 35% of GDP and employing 22% of the working population - comprises diverse subsectors, including oil and gas extraction, mining, metallurgy, chemicals, machinery manufacturing, and agriculture. Kazakhstan is renowned for its significant reserves of oil, natural gas, and minerals, making extraction and processing key industries. The country's metallurgical sector specializes in the production of steel, while chemical industries focus on petrochemicals and fertilizers. Machinery manufacturing encompasses a range of products, from agricultural machinery to industrial equipment. From January to September 2023, industrial production amounted to KZT 33,972.8 billion, with 15,925.1 billion (46.9% of the total volume) generated in the mining industry and 15,890.1 billion (46.8%) in the manufacturing industry (data Kazakh Bureau of National Statistics).

The tertiary sector is the main sector in Kazakhstan and growing steadily. It accounts for 52.6% of GDP and employs 66% of the working population. The financial sector, transport and technology are the main services produced in the country. The tourism sector, although not yet very developed, was experiencing strong growth before the outbreak of the pandemic. Nevertheless, it showed signs of recovery in 2023, when Kazakhstan welcomed 834,900 foreign tourists from January to September, a 37% increase compared to the same period one year earlier (data Kazakh Bureau of National Statistics). In 2023, banks reported strong average capitalization, profitability, and liquidity positions (IMF).

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 12.1 21.6 66.3
Value Added (in % of GDP) 3.9 32.3 56.3
Value Added (Annual % Change) -7.4 8.1 5.2

Source: World Bank - Latest available data.

 
Monetary Indicators 20162017201820192020
Kazakhstan Tenge (KZT) - Average Annual Exchange Rate For 1 USD 342.16326.00344.71382.70412.95

Source: World Bank - Latest available data.

 

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Foreign Trade

Kazakhstan is open to international trade, which represents 68% of its GDP (World Bank, latest data available). The country has an export-oriented economy that is highly dependent on shipments of oil and related products. In January-September 2023, the Republic of Kazakhstan primarily exported goods such as crude oil and crude oil products derived from bituminous minerals (54.2%), refined copper and raw copper alloys (4.3%), copper ores and concentrates (3.9%), radioactive chemical elements, and radioactive isotopes (3.3%), as well as ferroalloys (3%) and wheat and meslin (2.6%). Regarding imports, Kazakhstan's major imports comprised cars (5.2%), telephone sets (3.1%), bodies and cabins (2.7%), medicinal products (2.2%), parts and accessories of motor vehicles (2%), and oil and petroleum products (1.7% - data Kazakh Bureau of National Statistics).

In the same period, Kazakhstan's primary export partner countries included Italy (18.8%), China (18%), Russia (12.3%), Netherlands (5.8%), the Republic of Korea (5.6%), and Turkey (5.1%). In terms of imports, the main partner countries were Russia (26.7%), China (25.5%), Germany (5.1%), USA (4.5%), the Republic of Korea (3.8%), and Turkey (3.4%). Russia and Kazakhstan have undertaken joint projects in many areas, including energy. The government aims to improve the country's integration abroad to increase investment in the country. The country has been a WTO member since 2015 and has trade agreements with many countries in its region. It is also a member of the Eurasian Economic Union (Russia, Belarus, Armenia, Kyrgyzstan, and Kazakhstan), and the Common Economic Zone (Belarus and Russia). The Enhanced Partnership and Cooperation Agreement (EPCA) was signed in 2015 between the country and the European Union, and a revised version entered into force in March 2020.

The country has been recording trade surpluses since 1998 mainly due to the rise in shipments of oil and other commodities. As oil and gas are among Kazakhstan's main exports, the country's trade balance is affected by global commodity prices. In January-September 2023, Kazakhstan's foreign trade turnover amounted to USD 101,973.2 million and increased by 2.4% in nominal terms compared to January-September 2022. This included exports of USD 57,498.3 million (-10.2% less due to lower hydrocarbon prices) and imports of USD 44,475 million (+25% - data Kazakh Bureau of National Statistics). According to the latest figures available from the World Bank, the country’s trade balance in goods and services was positive by 15.4% of its GDP in 2022, compared to 8.6% one year earlier.

 
Foreign Trade Values 20192020202120222023
Imports of Goods (million USD) 37,75737,22241,17150,93460,655
Exports of Goods (million USD) 57,30946,44760,62584,59378,533
Imports of Services (million USD) 11,5418,4468,0359,51813,028
Exports of Services (million USD) 7,7545,2085,9357,96810,716

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20192020202120222023
Foreign Trade (in % of GDP) 64.957.058.768.361.8
Trade Balance (million USD) 18,4216,00924,22834,99719,862
Trade Balance (Including Service) (million USD) 14,6342,77222,12933,42118,164
Imports of Goods and Services (Annual % Change) 14.9-9.0-0.311.614.7
Exports of Goods and Services (Annual % Change) 2.0-11.32.310.21.9
Imports of Goods and Services (in % of GDP) 28.426.525.026.827.4
Exports of Goods and Services (in % of GDP) 36.430.533.641.634.4

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20242025 (e)2026 (e)2027 (e)2028 (e)
Volume of exports of goods and services (Annual % change) 3.67.74.34.51.6
Volume of imports of goods and services (Annual % change) 0.13.94.03.63.6

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
Kazakhstan is a member of the Organization of Shanghai Cooperation, the Eurasian Economic Community, the Common Economic Area and the Organization of Economic Cooperation.
 

Main Partner Countries

Main Customers
(% of Exports)		 2023
Italy 18.8%
China 18.7%
Netherlands 5.2%
Türkiye 5.0%
South Korea 4.8%
See More Countries 47.4%
Main Suppliers
(% of Imports)		 2023
China 27.4%
United States 4.2%
South Korea 3.6%
Türkiye 3.3%
Japan 2.6%
See More Countries 58.8%

Source: Comtrade, Latest Available Data

 

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Political Outline

Current Political Leaders
President: Kasym-Zhomart TOKAYEV (since 20 March 2019)
Prime Minister: Olzhas BEKTENOV (since 6 February 2024)
Next Election Dates
Presidential: 2029
Senate (Upper House): January 2026
Mazhilis (Lower House): March 2028
Main Political Parties
The main political parties of the country are:

- Amanat: previously known as "Nur Otan", centre, largest political party
- Auyl People's Democratic Patriotic Party (HDDP): social democracy, agrarianism
- Respublica Party: centre to centre-right
- Democratic Party of Kazakhstan (Aq Jol/Bright Path): centre, pro-reform, pro-business
- People's Party of Kazakhstan (QHP): left-wing, social democratic, originally funded as the Communist People's Party of Kazakhstan (QKHP)
- Nationwide Social Democratic Party (JSDP): social democracy.
Executive Power
The President is the head of the State and also the Commander-in-chief of the army. He can propose constitutional amendments, appoint and revoke the government, dissolve the parliament and call for a referendum when he wants. The Prime Minister is the head of the government. He and the Council of Ministers are appointed by the President.
Legislative Power
The Parliament consists of two houses. The Mazhilis, the lower house, consists 98 members of which 69 are directly elected in a single national constituency by party list proportional representation, and 29 are directly elected in single-seat constituencies to serve 5-year terms. The Senate, the upper house, is formed of 50 members, 40 of which are elected. The remaining 10 members are appointed by the President.
 

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