Kazakhstan

Kazakhstan’s growth is forecast at +4% in 2026, supported by oil production, infrastructure projects and manufacturing expansion. However, the economy remains exposed to external shocks, including mild global energy prices and logistical risks along key export corridors. Inflation is expected to moderate to 6-7% in 2026, but remains above target, driven by food and service costs and currency depreciation. The National Bank is likely to maintain a cautious monetary stance, gradually easing rates as inflation stabilizes, but still relatively anchored to the trajectory followed by the Bank of Russia. Domestic demand growth is slowing, but investment in transport, digitalization and agro-industrial clusters is expected to deliver tangible benefits. Risks include weaker oil demand, further ruble volatility and adverse weather impacting agriculture. The outlook is for moderate but sustainable growth, with efficiency and investment quality becoming more important than rapid expansion.

Kazakhstan’s business environment is shaped by its strategic location and resource wealth, but hampered by weak governance, corruption and market dominance by politically connected elites. Infrastructure gaps, especially in energy and logistics, constrain competitiveness, with recurrent power shortages highlighting underinvestment. The government is pursuing privatization and limiting new state-owned enterprises to foster competition, but implementation remains slow. Tax collection is low, and the regulatory environment remains unpredictable, with frequent policy shifts and interventionist measures. Membership in the Eurasian Economic Union and China’s Belt and Road Initiative offers trade opportunities, but also increases exposure to geopolitical risks. Progress in digitalization and private sector investment is positive, yet the institutional framework and legal protections for investors require strengthening to attract and retain FDI.