ADB Report: Kazakhstan’s Economic Growth Faces Hurdles Before 2025 Recovery

According to the latest report by the Asian Development Bank (ADB), Kazakhstan’s economic growth trajectory shows a brief deceleration in 2024 before bouncing back in 2025. The report projects a GDP growth rate of 3.8% for 2024, followed by a significant uptick to 5.3% in 2025. This rebound is attributed to increased investment and mining activity, particularly in the expansion of the Tengiz oil field.

However, the report highlights several potential challenges that could hinder Kazakhstan’s economic recovery. These include the geopolitical fallout from the Russian invasion of Ukraine and the possibility of disruptions to oil export routes. Such factors pose risks to the country’s economic stability and growth prospects.

Inflation is expected to gradually ease, with the inflation rate projected to decrease from 8.7% in 2024 to 6.3% in 2025. Notably, the rise in service prices, driven partly by government announcements of utility price increases, is identified as a significant contributor to inflationary pressures.

ADB emphasizes the importance of implementing structural reforms to address underlying issues in Kazakhstan’s economy, particularly concerning credit market distortions resulting from state-subsidized lending. The report recommends greater transparency in disclosing the extent of financial support provided through subsidized lending and suggests transitioning to alternative financing mechanisms to mitigate these distortions.

Since its accession to ADB in 1994, Kazakhstan has received substantial support from the organization, totaling around $7 billion in loans, grants, and technical assistance. This assistance underscores ADB’s commitment to fostering a resilient, inclusive, and sustainable economy in Kazakhstan and the wider Asia-Pacific region.

As Kazakhstan navigates through economic challenges, ADB remains a key partner in supporting the country’s efforts to achieve long-term economic stability and prosperity.