Kazakhstan Business & Economy - The Times Of Central Asia

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Labor Market

Kazakhstan’s Young Workforce Grows, But Sectoral Gaps Persist

The youth labor market in Kazakhstan remains a vital topic amid the country’s ongoing economic transformation. According to analysts from Finprom.kz, approximately 1.8 million young people aged 15 to 28 were employed across the country in 2024, an increase of 0.6% compared to the previous year. Regional Distribution of Youth Employment The highest concentration of young workers is in Almaty, where 243,200 young people are employed, up 5% from 2023. Almaty is followed by the Turkestan region. In contrast, the Ulytau, North Kazakhstan, and Zhetysu regions recorded the lowest figures for youth employment. Of the total number of employed youth, 1.4 million (77.7%) work as salaried employees. Additionally, the country is home to 331,900 young individual entrepreneurs, 58,300 self-employed workers, 2,700 founders or participants in economic partnerships, joint-stock companies, or cooperatives, and 2,400 engaged in private practice. Sectoral Breakdown Among all employed young people, the largest group, 424,400 individuals, are professionals, although this marks a 1.3% decrease from the previous year. They are followed by service and sales workers (291,700), unskilled laborers (281,700), technical and support staff (195,100), and industrial, construction, and transport workers (142,600). In terms of industry sectors, youth are primarily employed in wholesale and retail trade, automotive repair, education, and agriculture, including forestry and fishing. The lowest youth employment is seen in utilities (water and electricity supply) and real estate. Youth Unemployment: A Gradual Decline Youth unemployment is on the decline. In 2024, the number of unemployed individuals aged 15 to 28 dropped to 62,000, a 6.7% decrease from 2023. The unemployment rate stood at 3.7% among 16 to 24-year-olds and 3% among those aged 25 to 28. For comparison, the overall unemployment rate for the working-age population in Kazakhstan reached 4.7%. Almaty recorded the highest number of unemployed youth (11,100), followed by Astana (7,800) and the Almaty region (7,700). Ulytau, Pavlodar, and North Kazakhstan regions reported the lowest youth unemployment figures. As for the length of time spent job hunting in 2024, 18,200 young people searched for one to three months, 16,200 for three to six months, and 16,000 for less than a month. A smaller share, 7,500, searched for more than six months, and 4,000 had been looking for work for over a year. Broader Context and Causes of Unemployment Nationwide, 448,200 Kazakhstani citizens were unemployed in the fourth quarter of 2024. The unemployment rate was 4.2% among men (211,100) and 5.1% among women (237,100). The most affected age groups were 35 to 54 (256,900 people) and 55 to 64 (69,700). The most frequently cited reasons for unemployment included family responsibilities (61,400), layoffs or company closures (50,300), and difficulty finding suitable jobs (112,500). Other contributing factors were domestic duties (44,200), health issues (17,500), and challenges securing employment post-graduation (16,600). Policy Implications Experts highlight the importance of developing flexible employment policies tailored to the evolving labor market. Enhancing conditions for self-employment and youth entrepreneurship is seen as a potential key strategy for reducing youth unemployment in the long term.

Kazakhstan Attracts British Agricultural Technologies

Kazakhstan and the United Kingdom have signed a roadmap for cooperation in agriculture, paving the way for partnerships in agricultural science, the export and processing of agricultural products, and the transfer of British agricultural technologies. According to the Kazakh Ministry of Agriculture, the two countries also signed memorandums of understanding on collaboration in water resource management and the production of biopharmaceuticals in Kazakhstan in partnership with AstraZeneca. These agreements were concluded during the 11th meeting of the Kazakhstan-UK Intergovernmental Commission on Trade and Economic Cooperation, held in London last week. Deputy Minister of Agriculture Ermek Kenzhekhanuly stated that the introduction of British technologies and investment would enhance the competitiveness of Kazakhstan’s agro-industrial sector and improve its resilience to climate change. "In 2024, agricultural trade between Kazakhstan and the UK totaled $50 million. We intend to significantly increase this figure," he said. At the meeting, Deputy Minister of Foreign Affairs Alibek Kuantyrov, who headed the Kazakh delegation, emphasized the UK's strategic role: “The UK is one of Kazakhstan’s key trading partners and top investors, with total FDI (Foreign Direct Investment) exceeding $22 billion. We greatly value the UK’s contribution to the development of Kazakhstan’s key industries and are committed to building a next-level partnership, focused on investment, technology, and knowledge transfer.” The Strategic Partnership and Cooperation Agreement signed between the two countries last year has opened new avenues for collaboration in critical minerals, green energy and climate initiatives, transport and logistics, pharmaceuticals and healthcare, education, and financial services.

Vietnam’s Sovico Group Tapped to Manage Airport in Kazakhstan’s Kyzylorda Region

Vietnam's Sovico Group, owner of Kazakh airline Qazaq Air, soon to be rebranded as VietJet Kazakhstan, has been offered the opportunity to manage one of the airports in Kazakhstan’s Kyzylorda region. This week, Kazakhstan’s Deputy Prime Minister and Minister of National Economy, Serik Zhumangarin, confirmed Sovico’s interest in acquiring or taking over the management of an airport in the country, though he did not specify which facility was under consideration. On Thursday, during a session of the Senate (the upper house of Kazakhstan’s parliament), Deputy Foreign Minister Alibek Bakaev clarified that the proposal concerned an airport in the Kyzylorda region. “The point is that the Vietnamese side would manage the airport temporarily to improve its operations. This is not about a buyout, we do not sell strategic assets. We are attracting advanced technologies and companies to enhance the functioning and services of our airports from both technological and administrative perspectives,” Bakaev told reporters. The Kyzylorda region, located in southern Kazakhstan, hosts five airports: in the regional capital Kyzylorda, the district center of Aralsk, the village of Zhosaly, and two airports serving the Baikonur Cosmodrome, Krayniy and Yubileiny. The largest among them is Korkyt Ata International Airport, located in Kyzylorda city. Its 2,700-meter-long, 45-meter-wide asphalt runway, which can accommodate all categories of helicopters and first-class aircraft with a maximum take-off weight of 75 tons or more, includes the Tu-204, Boeing 757 and 747, and Airbus A320, as well as lighter aircraft. In November 2023, a new passenger terminal was inaugurated at Korkyt Ata, boosting the airport’s annual capacity from 300,000 to 2 million passengers. Korkyt Ata International Airport is currently managed by Airport Management Group and owned by the regional akimat (governor’s office). As previously reported by The Times of Central Asia, last autumn, Sovico Group announced plans to modernize and develop airport infrastructure in both the Kyzylorda and Turkestan regions of Kazakhstan.

Tourism

Kazakhstan’s Tourism Revival Attracts International Visitors and $1.8 Billion in Investment

Kazakhstan’s tourism sector is undergoing a notable resurgence, with a growing number of both international visitors and domestic travelers exploring the country. According to analysts at Ranking.kz, this revival is not merely inflation-driven; it reflects substantial structural changes and targeted investment in tourism infrastructure. Data from the National Statistics Bureau (NSB) shows that in 2024, the total volume of services provided by hotels, motels, and other accommodation facilities reached KZT 299.8 billion (approximately $580 million), marking a 30.8% increase from the previous year. Tax revenues from tourism-related businesses rose by 25.1% year-on-year to KZT 254 billion (about $492 million), underscoring the sector’s expanding fiscal footprint. Tourism continues to attract both domestic and international investors. In 2024, capital investment in the sector totaled KZT 947.5 billion ($1.8 billion), encompassing both private funding for resort and hotel construction and public subsidies aimed at developing tourism infrastructure. Throughout 2024, investment in fixed capital across the hospitality, arts, entertainment, and recreation sectors reached KZT 321.1 billion ($622 million). Of that, KZT 163.8 billion ($317 million) was directed toward accommodation and food services. In the first quarter of 2025, investment in these areas rose by a further 6.5%. The Almaty agglomeration, home to the Zailiyskiy Alatau ski resorts and scenic natural areas, remains a top destination for investment. In 2024, it accounted for 17.4% of total capital investments in the HoReCa (Hotels, Restaurants, and Catering) and entertainment sectors. Currently, approximately 55 large-scale investment projects are in development across Kazakhstan’s tourism sector. Notable among them are the creation of a multifunctional tourist quarter in Astana, the Aqbura Resort in the Akmola region, and the expansion of the Oi-Qaragai ski resort, one of the largest in Central Asia. The Oi-Qaragai development includes the construction of a new four-star hotel and significant upgrades to tourism infrastructure. With an estimated total investment of $150 million, the project is expected to generate over 1,200 new jobs. So far, $44.5 million has been invested, with an additional $57.4 million projected by the end of 2025.

Electricity

Kazakhstan Faces Record Power Deficit as Electricity Shortfall Hits 2.4 Billion kWh

Kazakhstan has experienced its most significant electricity imbalance in recent years. According to data from Energyprom.kz, the gap between electricity production and consumption reached 2.4 billion kilowatt-hours (kWh) in 2024, an increase of 200 million kWh from 2023, when the shortfall stood at 2.2 billion kWh. While the country’s total generation amounted to 117.9 billion kWh, domestic consumption exceeded 120.4 billion kWh. Imports Offset Domestic Shortfalls To address this growing energy deficit, Kazakhstan primarily imports electricity from Russia. Smaller volumes are supplied by Kyrgyzstan, although these are typically part of Russian transit deliveries to Kyrgyz consumers. Despite these imports, domestic electricity generation continues to grow at a modest pace. In 2024, total generation rose by 4.2%, with a 3% year-on-year increase recorded in the first two months of 2025. Nevertheless, the production boost has not been sufficient to meet demand, necessitating continued reliance on external suppliers. Decline in Coal Dependence One notable trend is the gradual reduction in Kazakhstan’s dependence on coal-fired thermal power plants (TPPs), traditionally among the most polluting energy sources. In 2024, the share of coal-fired generation declined from 77.4% to 74.9%, equivalent to approximately 88.4 billion kWh of total output. In contrast, the share of alternative power sources increased. Hydroelectric power plants (HPPs) contributed 9.5% of total generation, up 1.8 percentage points year-on-year, while gas turbine power plants (GTPPs) accounted for 10.1%, a 0.3-point increase. Renewable energy sources, including wind, solar, and biogas, produced 6.4 billion kWh, representing 5.4% of total electricity output. Revised Forecasts and Growing Challenges The Ministry of Energy of the Republic of Kazakhstan has updated its projections to reflect the sector’s challenges. As of early 2025, officials estimate the country’s electricity deficit could grow to 5.7 billion kWh by year-end. This revision stems from downgraded forecasts for generation volumes, which are now projected at 117.1 billion kWh, down from an earlier estimate of 121.8 billion kWh. Expectations for the commissioning of new generation capacity have also been lowered, further exacerbating the shortfall. Nonetheless, government planners remain cautiously optimistic. If several large-scale energy projects move forward on schedule, the deficit could shrink to 2.6 billion kWh by the end of 2026. A full build-out of planned capacity could even lead to a surplus. New Capacity and Long-Term Plans The government has outlined plans to construct 59 new energy facilities with a combined capacity of 26.4 gigawatts (GW). These include both new builds and upgrades to existing plants. Major initiatives involve constructing a nuclear power plant (2.4 GW) and a third state district power station (GRES-3) with 2.6 GW of capacity. Additionally, 11 regional centers are set to receive combined-cycle gas turbines with a total capacity of 4.5 GW. Renewable energy is also a key focus. By 2029, Kazakhstan aims to commission four large wind power plants equipped with energy storage systems, totaling 3.8 GW in capacity. These projects are being developed through intergovernmental agreements with investors from the United Arab Emirates, France, and China.

Kazakhstan’s Lower House Passes Controversial New Tax Code Amid Public Backlash

On April 30, the Mazhilis, the lower house of Kazakhstan’s parliament, approved a new Tax Code by majority vote. The draft law, part of President Kassym-Jomart Tokayev’s broader economic reforms, has triggered intense public and political debate. While proponents highlight its emphasis on modernization and fairness, critics warn of increased pressure on businesses and potential inflation. The final decision now rests with the president, following Senate review. Key Reforms and Adjustments According to Berik Beisengaliyev, head of the Mazhilis working group, the final version of the Tax Code diverges significantly from the original draft submitted in August 2024. One of the major changes concerns VAT (value-added tax). The government’s initial proposal to raise the VAT rate to 20% was scaled back to 16%. The threshold for mandatory VAT registration has been raised from 15 million to 40 million tenge. Reduced VAT rates are set for medical services and medicines, 5% from 2026 and 10% from 2027. Goods and services tied to guaranteed free medical care, compulsory health insurance, and treatment of orphan and socially significant diseases will be VAT-exempt. Additionally, the VAT exemption will extend to socially significant food items, books published domestically, and related publishing services. Agricultural producers will benefit from a higher VAT offset, increased from 70% to 80%. Other reforms include a shift from a permissive to a prohibitive activity list, with a unified 4% tax rate that regional maslikhats can adjust by ±50%. Special tax regimes for business-to-business transactions are also being expanded. Corporate income tax (CIT) has been reduced to 5% from 2026 and 10% from 2027 for social sector organizations. The social tax deduction for people with disabilities has increased to 5,000 MCI (19.6 million tenge in 2025). Meanwhile, the CIT rate for banks and the gambling industry has been raised to 25%, though a 20% rate remains on banks’ business lending income. A progressive income tax scale will be introduced: 10% on annual wages up to 8,500 MCI (33.5 million tenge or roughly $65,000), and 15% on income above that threshold. For dividends, the rate will be 5% on income up to 230,000 MCI (1 billion tenge, or $2 million), and 15% thereafter. The code also proposes higher excise taxes on alcohol, tobacco, and heated tobacco products, along with a new excise on energy drinks as part of a health initiative. Land use provisions have been amended to penalize inefficient use of agricultural land, with payment rates increasing up to 100-fold. Mineral resource usage rates will vary based on license duration and the number of plots held. Political Dissent and Criticism The Ak Zhol party opposed the code in both readings, citing disproportionate fiscal burdens on SMEs while sparing large extractive firms. The party also criticized the VAT hike as inflationary and warned about the opaque nature of the risk management system (RMS), which they say allows for discretionary actions by tax authorities. “The code is bloated with over 100 new articles, making it more difficult for entrepreneurs to navigate. This is not...