Kazakhstan Business & Economy - The Times Of Central Asia

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Civil Aviation

Kazakhstan ICAO Develop Civil Aviation Master Plan Through 2050

Kazakhstan is working with the International Civil Aviation Organization (ICAO) to develop a master plan for the country's aviation industry through 2050. The country aims to expand its international route network and increase air cargo traffic by capitalizing on its location between Europe and Asia. Saltanat Tompiyeva, chair of Kazakhstan's Civil Aviation Committee, announced the plan at the New Silk Way 2026 transport and logistics forum in Astana. In the first nine months of 2026, Kazakh airlines carried 12.4 million passengers, while the country's airports handled 136,500 tons of cargo. Kazakhstan's international route network covers 31 countries and 137 destinations. Since the beginning of the year, 24 new routes having been launched from Kazakhstan, including flights connecting Almaty with Chongqing and Warsaw, and Astana with Ulaanbaatar. According to Tompiyeva, the master plan will establish a long-term development framework for the aviation sector. To support domestic cargo carriers, Kazakhstan has introduced import incentives for certain categories of aircraft and intends to expand their access to international markets. Several airport development projects were also presented at the forum. Astana International Airport plans to build a second runway and expand its cargo infrastructure by 2035. There are also plans to build a second airport in Astana. In September, authorities signed a framework agreement with Singapore's Changi Airports International to cooperate on building the new airport and developing the existing one. Meanwhile, Aktau has plans for an aviation and logistics hub with projected investment of $400 million to $500 million and Karaganda Airport is developing the QarGo Hub project and aims to increase cargo throughput to 61,000 tons in 2026. The city is also home to Alatau Air Cargo, an airline established as KTZ Air Cargo in late 2025 and renamed in June 2026, which is preparing to launch cargo flights. SCAT Airlines also presented 12 investment projects to develop its hub in Shymkent, including airport infrastructure expansion and the establishment of aircraft maintenance facilities. Kazakhstan also plans to double its fleet of aircraft operated by Kazakh airlines by 2030.

Foreign Investment

Citibank Kazakhstan Chairperson Sees Opportunities for U.S.-Central Asia Collaboration

Foreign investors are looking outside Kazakhstan’s oil and gas sector. But turning that interest into investment will require predictable regulations and stronger cross-border connections, according to Saule Zhakayeva, chairperson of Citibank Kazakhstan’s management board and president of the American Chamber of Commerce in Kazakhstan (AmCham). Citi has operated in Kazakhstan since 1994, when it opened a representative office in Almaty. In an interview with The Times of Central Asia, Zhakayeva discussed the country’s investment climate and its role as a regional business hub. She also addressed the future of economic relations between the United States and Kazakhstan. TCA: How is foreign investor interest in Central Asia evolving, and which of Kazakhstan’s strengths are already translating into investment? Where do you see the strongest commercial opportunities over the next three to five years, and what would help turn untapped potential into committed capital? Zhakayeva: Investors today are looking for markets that combine economic stability, access to natural resources, strategic geography, and long-term growth potential. Kazakhstan offers each of these attributes. The country has established itself as the largest economy in Central Asia, maintains a relatively strong institutional framework, and continues to pursue reforms aimed at improving the investment climate. Most notably, investor interest is becoming increasingly diversified. Historically, foreign investment was concentrated primarily in oil and gas. Today, we see growing interest in transportation and logistics, renewable energy, critical minerals, digital infrastructure, financial services, manufacturing, and data-related investments. This growing interest is also reflected in the increasing level of engagement between international investors and Kazakhstan. As President of the American Chamber of Commerce in Kazakhstan, I have seen firsthand the strong momentum in U.S.-Kazakhstan business relations. Throughout 2026, Kazakhstan has hosted a growing number of high-level business engagements involving senior representatives of American companies and institutions, including the U.S. Chamber of Commerce Business Mission to Kazakhstan and other executive-level dialogues focused on investment, trade, digital transformation, energy, and infrastructure. AmCham Kazakhstan also led its first business delegation to Washington, D.C., bringing member companies together to strengthen bilateral economic ties, promote Kazakhstan's investment opportunities, and advocate for deeper economic cooperation. These activities underscore the growing recognition of Kazakhstan and Central Asia as strategically important destinations for long-term investment and commercial cooperation. More importantly, they are beginning to translate into tangible outcomes. For example, in 2026, the U.S. International Development Finance Corporation announced plans to explore up to $700 million in financing opportunities to support the development of Kazakhstan's critical minerals sector. Kazakhstan's location at the crossroads of Europe and Asia has become increasingly important as global companies diversify supply chains and seek alternative trade routes. The development of the Trans-Caspian International Transport Route is further strengthening Kazakhstan's role in regional and global commerce, creating opportunities far beyond traditional sectors. Similar dynamics are being observed across the region, where alternative trade routes, logistics investments, and infrastructure development are becoming increasingly important to global investors. We are also seeing growing international interest in strategic sectors linked to global energy security and the energy transition....

Trans-Caspian Cable

Kazakhstan and Azerbaijan Launch Trans-Caspian Fiber-Optic Cable

Kazakhstan and Azerbaijan have launched the first fiber-optic communications link across the Caspian seabed. The approximately 380-kilometer cable connects Aktau and Sumgait, with Presidents Kassym-Jomart Tokayev and Ilham Aliyev inaugurating the line in Baku on October 15. Russian operators have long dominated Kazakhstan’s international connectivity. A 2025 Internet Society report identified them as the country's principal suppliers of international bandwidth. The new route will give operators the option of directing data through Azerbaijan, Georgia, and Turkey toward Europe, providing redundancy independent of existing routes through Russia. This is particularly important during outages or congestion on existing connections. Part of the broader Digital Silk Way initiative, the cable could also benefit Uzbekistan and Kyrgyzstan, both of which rely on Kazakhstan for international internet connectivity. The cable, supplied by a Chinese manufacturer, uses optical fiber made in Japan and terminal equipment from Western suppliers, according to the Caspian Policy Center. It has a design capacity of at least 400 terabits per second and was developed through CaspiLink, a joint venture between Kazakhstan’s Kazakhtelecom and Azerbaijan’s AzerTelecom. The project had been under discussion since 2019. In 2024, planned investment was estimated at more than 23 billion tenge (approximately $50 million). Marine surveys began in August 2025. Underwater cable laying began in July 2026 and was completed on August 5, with the line inaugurated on October 15. Kazakhstan also hopes to use the new connection to attract technology companies. Bagdat Mussin, chairman of Kazakhtelecom’s management board, said the cable could support Kazakhstan’s Data Center Valley, a complex under development in Ekibastuz for cloud computing and artificial intelligence. Mussin also told reporters that adjustments to the line would continue through the end of 2026, with the benefits expected to be felt no earlier than early 2027, according to Tengrinews. As The Times of Central Asia previously reported, Kazakhstan must also secure reliable electricity supplies and sufficient demand for its planned data center capacity. Kazakhstan's Ministry of Artificial Intelligence and Digital Development estimates that the new route could help more than double the country's international data transit to 21.6 Tbps in the coming years. How much traffic will initially use the cable, including traffic redirected from existing routes through Russia, remains unclear.

Growth Forecasts

Central Asia Economic Growth Expected to Slow in 2027

After several years of rapid expansion, Central Asian economies are expected to lose some momentum. The European Bank for Reconstruction and Development (EBRD) forecasts that regional economic growth will slow from 5.8% in 2026 to 5.3% in 2027. However, growth in manufacturing and construction will not necessarily translate into comparable increases in household incomes. The forecast appears in the EBRD’s September report. The bank’s Central Asia figures also include Mongolia, so the regional growth rate should not be interpreted as an average for the five Central Asian countries alone. The Eurasian Fund for Stabilization and Development (EFSD) has published its own projections for Kazakhstan, Kyrgyzstan, and Tajikistan. They differ somewhat from the EBRD’s forecasts but also anticipate continued economic growth. Kyrgyzstan and Tajikistan Maintain Strong Growth The EBRD expects the economies of Kyrgyzstan and Tajikistan to grow by 7% in 2027, the highest rates projected for the five countries in the region. Kyrgyzstan has experienced a construction boom in recent years, driven by investment in roads, housing, and energy infrastructure. The service sector is also expanding. The country’s economy grew by 11.9% in the first half of 2026. However, rapid growth has been accompanied by rising food and fuel prices. The country's performance is closely tied to economic conditions in Russia, where a significant number of Kyrgyz migrant workers are employed and from which Kyrgyzstan imports the vast majority of its fuel. Changes in the Russian labor market can affect remittances and household spending in Kyrgyzstan. In Tajikistan, growth is supported by investment and exports, particularly precious metals and mineral resources. The economy expanded by 8.2% in the first half of 2026. Tajikistan also relies heavily on imported goods and equipment, with spending on imports exceeding export earnings. Remittances from migrant workers in Russia are an even more important source of household income for Tajiks than for their Kyrgyz neighbors, while rising fuel costs are putting additional pressure on family budgets. Kazakhstan Remains Dependent on Oil Exports For Central Asia’s largest economy, the EBRD forecasts growth of 4.5% in 2027, while the Eurasian Fund for Stabilization and Development expects 5%. In 2026, Kazakhstan’s economy has been constrained by disruptions to oil production and exports. Problems arose at the Tengiz oil field and along the Caspian Pipeline Consortium (CPC) export route, through which a significant share of Kazakhstan’s oil reaches global markets via Russia. Meanwhile, Kazakhstan’s factories increased production. But even growth in industries outside the oil sector has yet to eliminate the country’s dependence on commodity exports. For international buyers, the reliability of supply routes is also important. Disruptions to the CPC can restrict Kazakhstan’s oil exports regardless of demand or global prices. The Times of Central Asia recently examined the challenges facing Kazakhstan’s oil logistics. Inflation is another concern. According to the EFSD, prices in Kazakhstan are expected to rise by approximately 9.5% by the end of 2026. This means economic expansion will not necessarily be accompanied by a noticeable improvement in household purchasing power. Uzbekistan’s Growth Driven by...

Economic Growth

Kazakhstan Economic Growth Hits 4.2% Despite Decline in Oil Production

Kazakhstan’s economy grew by 4.2% in the first nine months of 2026, despite an 8.3% drop in oil production. Growth in construction, manufacturing, transportation, and trade helped offset the decline in the country's main export industry, although real household incomes have barely risen. According to figures presented on October 13 by Deputy Prime Minister and Minister of National Economy Serik Zhumangarin, Kazakhstan produced 69.4 million metric tons of oil between January and September. GDP growth accelerated slightly from 4.1% in the first eight months of the year. Kazakhstan is Central Asia’s largest economy and a significant supplier of oil to the global market. Most of its oil exports pass through Russia, including via the Caspian Pipeline Consortium (CPC) pipeline system to a terminal on the Black Sea. Disruptions along these routes can force producers to cut output. The Times of Central Asia previously examined why even high global oil prices do not always translate into the expected revenues for Kazakhstan. According to government estimates, the non-resource sector expanded by 5.4%. Manufacturing, construction, transportation, and trade accounted for more than three-quarters of GDP growth. Manufacturing output rose by 8.6%, with machinery production increasing by 22.8%. Over the nine-month period, automobile production increased by nearly 30%, while electrical equipment output rose by approximately 21%. Production of fabricated metal products, food, chemicals, and pharmaceuticals also increased. Investment in fixed assets, including buildings and equipment, rose by 7% between January and September, reaching 16.1 trillion tenge (approximately $35.7 billion). Private investment accounted for 85.7% of the total and increased by 18.2%, with particularly strong growth in manufacturing and construction. At the same time, the strengthening of the tenge, Kazakhstan’s national currency, has put pressure on exporters when dollar-denominated earnings are converted into local currency. Consumer lending has also slowed: annual growth in consumer loans fell from 26.4% in August 2025 to 10.4% in August 2026. Annual inflation stood at 9.3% in September, down from 9.8% in August. Prices are still rising, although somewhat more slowly. In the second quarter, real household incomes per person, adjusted for inflation, grew by just 0.7% compared with the same period last year, following an increase of just 0.1% in the first quarter.

Mineral Processing

Kazakhstan Proposes Local Rare Earth Processing Partnership with Belgium

Kazakhstan has invited Belgian companies to help process critical minerals domestically. Astana hopes to gain access to European processing technologies to expand exports of higher-value products used in high-tech industries. For now, the two sides are discussing laboratory testing and potential projects, with no new investment agreements announced. The proposal was presented at a Kazakhstan-Belgium seminar held on October 12 at Nazarbayev University in Astana. Vice Minister of Industry and Construction Olzhas Saparbekov said Kazakhstan could supply 21 of the 34 critical raw materials on the European Union's list. "We are ready to discuss phased models under which processing is gradually transferred to Kazakhstan along with the necessary technologies and expertise," Saparbekov said. Belgian companies were offered opportunities to cooperate in extracting metals using chemical solutions, separating rare earth oxides, recycling, and manufacturing industrial equipment. Potential projects include producing materials for batteries, semiconductors, specialty alloys, and permanent magnets. The participants also discussed shipping products to Europe through Belgium's port of Antwerp. Kazakhstan already produces several sought-after industrial metals, including tantalum, niobium, and beryllium. It also plans to begin gallium production, with a target of 15 metric tons a year. However, developing more advanced processing facilities remains a challenge. Since 2018, Kazakhstan has allocated more than 67 billion tenge (approximately $149 million) to geological exploration. According to the ministry, surveys at 11 exploration sites have identified 38 promising areas. Commercial development will require determining the metal content of the ores and the cost of extracting them. In particular, studies of the Kuirektykol site in the Karaganda region have revealed significantly larger rare earth reserves than previously estimated. The size of the discovery does not establish whether mining would be commercially viable. To study mineral resources and test processing technologies, Kazakhstan plans to establish a regional rare earth research center with the participation of European institutions. The European Bank for Reconstruction and Development has supported the preparation of a preliminary feasibility study. Construction of the laboratory complex is expected to begin in 2027, with operations scheduled to start in 2028. Representatives of metals processor Molymet Belgium and Australia's Lindian Resources Limited, which owns a rare earth processing plant in Kazakhstan, took part in the discussions. The next stage of negotiations is expected to involve exchanging samples, testing processing methods, and preparing feasibility studies. For European industry, Kazakhstan could become an additional supplier of critical minerals amid Europe's dependence on Chinese processing capacity. However, the country's stated potential to supply 21 types of critical raw materials encompasses projects at different stages of development, ranging from geological exploration to operating production facilities.