Kazakhstan is entering 2024 with significant investment momentum, as it secures the sixth position in the Foreign Direct Investment (FDI) Standouts Watchlist for 2024, released on December 11 by the fDi Intelligence service of the Financial Times. The country’s robust macroeconomic performance and continuous reforms have played a key role in making Kazakhstan one of the top FDI destinations globally.
The study conducted by fDi evaluates the macroeconomic and FDI trajectories of the world’s top 50 FDI destinations. It uses data from the International Monetary Fund (IMF) and the FT’s cross-border investment monitor called fDi Markets. The purpose of this comprehensive analysis is to identify countries starting the new year with a strong macroeconomic performance and impressive FDI momentum.
The International Monetary Fund (IMF) has forecasted a real gross domestic product (GDP) growth of 4.6 percent for Kazakhstan in 2024, which is closely aligned with the Fund’s November projection of 4.8 percent for the year 2023. The country has been grappling with inflationary pressures, which peaked at slightly over 21 percent year-on-year in February 2023. However, measures taken by the government have helped curb this surge, and inflation was projected to stabilize around 10 percent by the end of 2023.
In its October 2023 report, the IMF highlighted Kazakhstan as an example where prioritizing governance reforms and strengthening the rule of law is instrumental in driving other reforms. The IMF noted that improved governance typically plays a crucial role in pushing forward reforms by building trust and confidence in public institutions and creating a conducive business climate.
The IMF also noted how Kazakhstan’s GDP has benefitted from a strong domestic demand and increased oil production attributed to the easing operational constraints affecting the Caspian Pipeline Consortium and the Tengiz oil field expansion.
In Central Asia, IMF has assessed that trade and financial inflows, particularly following Russia’s conflict with Ukraine, continue to support economic activity. However, supply-side disruptions linked to this conflict have also contributed to regional inflation.
Kazakhstan’s neighbor in the Caspian region, Azerbaijan, has secured the seventh position in the above-mentioned FDI watchlist for 2024 by fDi Intelligence.
