Kazakhstan Business & Economy - The Times Of Central Asia

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Middle Corridor

Can Caspian Cargo Fleets Meet Middle Corridor Demands?

Construction of infrastructure along the Middle Corridor, also called the Trans-Caspian International Trade Route, to ship goods between China and Europe is progressing at a frantic pace. When Russia launched its full-scale invasion of Ukraine in late February 2022, it inadvertently gave a new impetus to the development of a trade network through Central Asia and the South Caucasus that had been slowly taking shape since the end of the 1990s. One of the most formidable challenges along the Middle Corridor is boosting maritime cargo across the Caspian Sea. Steps are being made, including some significant recent moves, but the capacity of shipping east-to-west over the Caspian Sea faces challenges in meeting the ever-growing demand for commercial vessels. By Leaps and Bounds In 2022, the volume of cargo through the Middle Corridor was some 1.5 million tons, more than twice the amount transported in 2021. In 2023, it topped 2.7 million tons, in 2024 was about 4.5 million tons, and in 2025 was approximately 5.2 million tons. Turkish President Recep Tayyip Erdogan visited Kazakhstan on May 13-14, where his host, President Kassym-Jomart Tokayev, said the figure could reach 10 million tons “in the near future,” and are predictions it could happen as soon as 2027. The roads, railways, and port facilities along the Middle Corridor are expanding rapidly. However, according to a report from Azerbaijan’s Trend news agency in mid-May, the Azerbaijani Caspian Shipping Company (ASCO) says that since 2013, only “a total of 35 new vessels have been commissioned.” The Merchant Fleets of Kazakhstan and Turkmenistan On the eastern side of the Caspian Sea, Kazakhstan and Turkmenistan have been working to increase their maritime shipping. Both countries invested heavily in upgrading their Caspian ports, in Kazakhstan’s case at Aktau and Kuryk, and for Turkmenistan at Turkmenbashi City. Since the end of April, both countries have moved to boost their potential to ship cargo across the Caspian. Kazakhstan’s state railway company, Kazakhstan Temir Zholy (KTZ), announced on April 30 that it would build its own maritime fleet starting with six new vessels, each with a deadweight of up to 9,900 tons and able to carry up to 537 twenty-foot equivalent units (TEU). Once completed, those six cargo ships will join the two dry cargo and three container vessels in the Caspian Sea operated by Kazakhstan’s state maritime shipping company Kazmortransflot. The three container ships – Berkut, Sunkar, and Barys – all started operation in 2019, have a deadweight of 5,200 tons, and can each carry up to 350 TEU. The two dry cargo ships, the Beket Ata and Turkestan, have a deadweight of 5,467 tons and can carry 4,182 tons. On May 12, the dry cargo ship Gadamly arrived at the Baku International Sea Port. The Gadamly is Turkmenistan’s first dry cargo vessel and is able to carry up to 240 TEU. A second cargo vessel, Manzil, should be launched before the end of this year. Arif Aghayev, the deputy chairman of Azerbaijan Railways, said at a ceremony marking the...

Fuel Prices

Why Oil-Rich Kazakhstan Is Bracing for Higher Fuel Prices

Fuel prices in Kazakhstan are expected to rise significantly, according to Kazakh energy analysts. Although the country remains a major oil exporter and plans to expand its refining capacity, analysts warn that these measures alone will not resolve the structural problems behind rising fuel costs. Some Kazakh energy analysts have already described 2026 as “the final year of cheap gasoline” before Kazakhstan becomes more closely integrated into the Eurasian Economic Union’s common oil and petroleum products market. The situation is further complicated by the conflict in the Middle East, which has added volatility to global oil markets. For Kazakhstan, however, the deeper problem is domestic: low-regulated prices, refinery constraints, gray-market exports, and the rising cost of crude. Higher fuel prices also carry particular political sensitivity. The unrest that shook the country in January 2022 was triggered by a sharp increase in liquefied petroleum gas prices. Any new surge in gasoline or diesel costs could ripple through the economy, accelerating inflation and increasing social tensions. A Politically Explosive Commodity Kazakhstan’s leadership learned the political risks of fuel pricing during the January 2022 crisis, when protests erupted in the western city of Zhanaozen after liquefied petroleum gas prices rose sharply. Although the government quickly intervened and blamed unscrupulous suppliers, the protests rapidly escalated into nationwide unrest. Over several days, 238 people were killed, government buildings and security facilities were seized in multiple cities, and the country faced its worst political crisis since independence. In response, the authorities imposed a 180-day moratorium on fuel price increases, with some restrictions lasting even longer. Even then, it was clear that artificially suppressing fuel prices required substantial state subsidies, while the cost of oil extraction continued to rise. The “Last Year” of Cheap Fuel? Earlier this year, Kazakhstan’s Ministry of Energy warned that domestic fuel prices would need to gradually move closer to those in Russia by the end of 2026. Officials linked the expected price convergence to the planned launch of the EAEU’s common oil and petroleum products market on January 1, 2027. At current exchange rates, gasoline prices at Kazakh filling stations remain roughly half those in Russia. A similar price gap exists with Kyrgyzstan, encouraging the unofficial export of cheap Kazakh fuel to neighboring countries. In practice, that means Kazakhstan faces pressure from both sides: raising prices risks public anger, while keeping them low encourages fuel to leave the country unofficially. The Energy Ministry insists that future price increases will not amount to “shock therapy” for consumers. Officials say the transition toward a common EAEU fuel market will occur gradually through legislative harmonization rather than through an immediate equalization of prices across member states. At the same time, the authorities acknowledge that the large price gap with neighboring countries creates strong incentives for gray-market exports of subsidized fuel, increasing the risk of artificial shortages inside Kazakhstan. According to the ministry, the current low-price environment also limits investment in the sector. Significant funding is needed to expand the Shymkent, Atyrau and Pavlodar refineries and,...

Automotive Industry

Kazakhstan’s Auto Industry Maintains Growth Despite Slowing Momentum

Production of cars and other automotive equipment in Kazakhstan continued to grow rapidly in early 2026, although the pace of expansion has begun to slow amid intensifying competition and changing market conditions. According to the Kazakhstan Automobile Union, domestic manufacturers produced 63,403 units of automotive equipment between January and April, an increase of 35.1% compared to the same period last year. During the first quarter, growth had stood slightly higher at 36.8%. In April alone, Kazakh factories produced 18,144 units of automotive equipment, up 31% year-on-year and nearly 4% higher than in March. The figures include passenger cars, trucks, buses, special-purpose vehicles, trailers, and semi-trailers. “Despite intensifying competition and changes in market conditions, Kazakhstan’s automotive industry continues to maintain strong growth momentum,” said Anar Makasheva, president of the Kazakhstan Automobile Union. According to Makasheva, automotive manufacturing now accounts for more than 42% of the country’s machine-building sector. The value of production of automobiles, trailers, and semi-trailers reached approximately $1.6 billion during the first four months of the year, nearly 20% higher than in the same period in 2025. Passenger vehicles remain the core driver of growth in Kazakhstan’s automotive industry. Between January and April, the country assembled 59,057 passenger cars, 36.8% more than a year earlier. Production of trucks increased by 9.3% to 1,967 units, while bus production rose by 34.3% to 986 units. Output of trailers and semi-trailers grew by 17.1%, although production of special-purpose vehicles declined by around 12%. The largest manufacturer remains the Kostanay-based Allur plant, which produced 23,161 vehicles during the reporting period. Astana Motors Manufacturing Kazakhstan, located in Almaty, manufactured 17,710 units, while Hyundai Trans Kazakhstan assembled 13,373 vehicles. The new Kia Qazaqstan plant in Kostanay continued to ramp up production, assembling 6,575 vehicles in the first four months of the year. The commercial vehicle segment showed more uneven dynamics. QazTehna, based in the city of Saran, more than doubled production to 1,025 units, while output at KAMAZ-Engineering JSC declined by 41%. Among domestically produced models, the Chevrolet Cobalt, assembled in Kostanay, remained the market leader. Sales of the model reached 7,755 units during the first four months of the year. The list of top-selling models also included the Hyundai Tucson, Kia Sportage, Hyundai Santa Fe, and several Chinese models, including the Changan CS55 Plus, Changan CS35 Max, Haval M6, and Haval Jolion. The growing presence of Chinese brands is part of the expanding influence of Chinese automakers across Central Asia and the post-Soviet region following the partial withdrawal of some Western and Russian market players. Kazakhstan’s automotive industry remains one of the fastest-growing sectors of the country’s industrial economy. In 2025, Kazakhstan set a national production record by manufacturing more than 171,000 vehicles. As previously reported by The Times of Central Asia vehicle production growth in the first quarter of 2026 was approaching 37%.

Copper Industry

Kazakhstan and Chinese Investors Launch “Green” Copper Metallurgy Project in Aktobe

Kazakhstan has begun construction of a copper scrap recycling and copper rod production plant in Aktobe with the participation of Chinese investors, as the country seeks to develop higher-value metals processing and expand lower-carbon industrial production. The $100 million project is being implemented in the Aktobe Special Economic Zone (SEZ) with support from KAZAKH INVEST and the Aktobe Region administration. It involves China’s Beijing Jinyi Yuanfang Holding Group and Kazakhstan’s Phoenix Industrial Group. The new facility will process copper scrap collected across Kazakhstan and produce up to 25,000 tons of refined copper annually. Authorities hope the project will help turn Aktobe into a regional center for the copper industry and expand exports to markets in the Eurasian Economic Union and the European Union. The plant is scheduled to begin operations in 2027 and is expected to create about 250 jobs. “This project is a concrete result of negotiations conducted during our working visit to the People’s Republic of China,” Deputy Akim of the Aktobe Region Abzal Abdikarimov said. According to Abdikarimov, the plant will be the first major industrial enterprise launched within the Aktobe SEZ and is expected to become a new driver of regional economic growth. The use of copper scrap as raw material is being presented as part of a “green metallurgy” strategy aimed at reducing the sector’s carbon footprint and increasing the localization of industrial production. The project also points to China’s growing role in Kazakhstan’s industrial development and Beijing’s efforts to expand its economic influence across Central Asia. KAZAKH INVEST Chairman Sultangali Kinzhakulov said cumulative Chinese investment in Kazakhstan has already reached $25 billion. He added that around 250 joint projects involving Chinese participation are currently at various stages of implementation, while approximately 60% of all Chinese investment in Central Asia is concentrated in Kazakhstan. “Over the next three to five years, total Chinese investment is expected to reach $100 billion,” Kinzhakulov said. Locating the enterprise within a SEZ provides investors with tax and customs incentives, as well as access to the transport infrastructure of western Kazakhstan. The project is being launched as Kazakhstan modernizes its metallurgical sector. As previously reported by The Times of Central Asia, Kazakhstan plans to invest approximately $174 million in non-ferrous metallurgy projects in 2026.

Fuel Prices

Central Asia Feels Fuel Strain as Kazakhstan Prices Edge Higher

Kazakhstan's fuel market is moving into a new phase after the end of the government freeze on AI-92 gasoline and diesel. Pump prices have risen by small amounts so far. Retail prices are rising cautiously amid growing pressure from neighbors where fuel costs more. Kazakhstan still has some of the cheapest gasoline in the region, but that advantage creates a risk: cheap fuel attracts cross-border demand and makes it harder to fund the refining capacity the country says it needs. On October 16, 2025, Kazakhstan's government introduced a moratorium on further increases in AI-92 gasoline and diesel as part of a wider anti-inflation package. The decision also put the Energy Ministry, the competition agency, and regional authorities in charge of keeping supplies stable. The measure came after inflation and tariff reforms had raised concerns about household costs. The freeze ended on April 1, 2026, but by mid-April, the Energy Ministry was still trying to calm expectations. Kazinform cited Vice Minister of Energy Kaiyrkhan Tutkyshbayev on April 14 as saying most prices had risen mainly by one tenge after the moratorium was lifted, and that the state would not allow a sharp jump. The tone matched what drivers were seeing: a controlled rise rather than a sudden reset. The memory of January 2022, when an LPG price jump helped spark unrest, still hangs over fuel policy. The end of the freeze also fed into inflation expectations. National Bank Governor Timur Suleimenov warned in April that renewed growth in fuel prices and utility tariffs had to be handled cautiously, because a sharp reset could reverse the slowdown in inflation. The National Bank later said reforms in utility tariffs and fuel prices accounted for 32.9% of household inflation expectations in March. That made the fuel moratorium more than a pump-price measure: it was one of the state’s main tools for containing expectations while inflation remained in double digits. An April 9 check by Tengri Auto found that most filling stations in Almaty and the surrounding area were still selling fuel close to the previous price range. Several major networks, however, had already moved AI-92 toward 240 tenge per liter. AI-95, which was not covered by the main freeze, had risen to 328 tenge at one network. A Kazinform market check published on May 25 showed the same gradual pattern. AI-92 was listed at 238-239 tenge per liter in Astana, 238-241 tenge in Almaty, and 224-227 tenge in Shymkent. Diesel stood at 329 tenge in Astana, 330-337 tenge in Almaty, and 332-335 tenge in Shymkent. The figures point to a market that is moving, but still under close control. Fuel is also feeding into Kazakhstan's broader inflation picture. The Bureau of National Statistics put annual inflation at 10.6% in April 2026. Petrol prices were up 16.1% year-on-year and added 0.53 percentage points to annual price growth. Transport as a category added 1.1 percentage points. Fuel is one of the costs households notice most directly, and its effects spread through freight, food distribution, agriculture, taxis,...

Livestock Exports

Kazakhstan Receives Foot-and-Mouth Disease-Free Status

Kazakhstan has received international recognition from the World Organisation for Animal Health (WOAH) as having foot-and-mouth disease-free zones covering its entire territory, making it the only country in Central and East Asia with this status, according to Kazakhstan’s Ministry of Agriculture. The decision was adopted during the WOAH’s 93rd General Session in Paris. The certificate was presented to Kazakhstan's delegation on May 22. The status, granted to zones recognized as free from foot-and-mouth disease with vaccination, is considered one of the most important international veterinary certifications and can provide access to more profitable export markets for livestock products. Kazakhstan’s Ministry of Agriculture said the recognition was the result of a large-scale modernization of the country’s veterinary system and the restoration of international sanitary status for a number of animal diseases. Kazakhstan also annually confirms its official disease-free status for African horse sickness and classical swine fever, while maintaining WOAH self-declarations for highly pathogenic avian influenza and African swine fever. “Today, the entire territory of the country is covered by internationally recognized zones free from foot-and-mouth disease with vaccination, which is an important result of the state’s systematic work,” Agriculture Minister Aidarbek Saparov said. The new status is already contributing to the expansion of export markets for agricultural products from Kazakhstan, the ministry said. According to the Agriculture Ministry, China has opened its market to imports of slaughter cattle, beef hides, and poultry meat from Kazakhstan. Azerbaijan has authorized imports of camels, beef and lamb products, dairy goods, honey, and fish. Mongolia has opened its market to live small livestock, while Iraq has approved imports of cattle and sheep for slaughter. In addition, Georgia has authorized imports of cattle from Kazakhstan and small livestock, Iran has opened its market to hides and wool from hoofed animals, and the European Union has approved imports of honey from Kazakhstan. WOAH Director General Emmanuelle Soubeyran, during a meeting with Saparov, said Kazakhstan demonstrates a “consistent and systematic approach” to developing its veterinary services and implementing international standards. She also proposed that Astana share its experience in veterinary system modernization with other WOAH member states. The recognition comes amid growing agricultural exports from Kazakhstan. The Times of Central Asia previously reported that the country significantly increased exports of meat and livestock products in 2025.