Kazakhstan macro: reaching new local highs
Recent weeks have been eventful: economic statistics showed improvement, and the Kazakh government released its medium-term macroeconomic forecast, outlining several key budget parameters for 2026 and beyond. However, the detailed 2026 draft budget was unavailable as of this writing. The National Bank of Kazakhstan held its regular Monetary Policy Committee meeting and kept the base rate unchanged, acknowledging that inflationary pressures would remain high for the rest of the year and hinting at potential future rate hikes.
On a positive note, economic growth has gained momentum this year. In July, the short-term economic indicator (the Bureau’s monthly measure of economic activity) grew by approximately 11% y-o-y, pushing 7M25 y-o-y growth to an impressive 9.3%. Statistics indicate that growth has primarily been driven by increased investment in production capacity, including foreign direct investment, and rapidly growing household credit, rather than government stimulus. Investment rose by 16.1% y-o-y in the first seven months of 2025, while household credit grew by about 2% m-o-m for several months consecutively, boosting retail sales (up by 6.6% y-o-y in 7M25). The current growth model largely depends on production capacity investments, potentially ensuring high future growth rates. High inflation, meanwhile, signals persistent overheating and inefficiencies but also boosts nominal budget revenues.
Examining a wider range of key segments in the Kazakh economy and reconstructing the missing or distorted data, we note a continued moderation of economic growth for 2026 across major sectors. However, growth will likely remain relatively high.
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