EDB Forecasts Kazakhstan’s GDP Growth to Accelerate to 5.5% in 2025

Kazakhstan’s gross domestic product (GDP) is projected to grow by 5.5% in 2025, up from an estimated 4.8% in 2024, according to the Eurasian Development Bank (EDB). The forecast suggests this growth rate will be sustained through 2026 and 2027. “We expect Kazakhstan's economic growth to accelerate to 5.5% in 2025 after 4.8% in 2024, with these rates remaining unchanged in 2026-2027,” said Aigul Berdigulova, Senior Analyst at the EDB’s Country Analysis Center, during the presentation of the bank’s macroeconomic forecast. She emphasized that government initiatives to boost investment, particularly through the national holding company Baiterek, will be pivotal. Funding volumes for the economy are expected to reach KZT 8 trillion (approximately $15.2 billion), equivalent to about 6% of GDP. “This measure will help unlock investment potential in manufacturing, transport, and construction,” Berdigulova said. According to the EDB, these investment-backed policies are expected to counterbalance external shocks. Additional growth drivers include expansion at the Tengiz oil field, projected to contribute 0.4 to 0.6 percentage points to GDP growth in 2025, and ongoing fiscal stimulus, regional development efforts, and infrastructure projects. Kazakhstan ranks fourth among the EDB’s member states in terms of projected GDP growth for 2025, following Kyrgyzstan (10.3%), Tajikistan (8.4%), and Uzbekistan (6.5%). It is on par with Armenia (5.5%) and ahead of Belarus (3%) and Russia (2%). Inflation Set to Rise in 2025 Despite the optimistic growth forecast, inflationary pressures are expected to intensify. The EDB projects Kazakhstan’s inflation rate will reach 11.9% in 2025, its highest among the bank’s member countries. “Inflation in Kazakhstan is rising this year due to the weakening of the tenge observed at the end of 2024,” Berdigulova explained. She also pointed to continued increases in utility tariffs and inflation expectations amid discussions of tax and budget reforms, including a planned VAT hike. Inflation is expected to peak in the second quarter of 2026 before declining to around 8.5% by 2027. For comparison, Armenia is forecast to have the lowest inflation among EDB members at just 3.1%. According to preliminary data from Kazakhstan’s Ministry of National Economy, the country’s GDP grew by 6% year-on-year in the January-May 2025 period. However, not all institutions are as optimistic. The European Bank for Reconstruction and Development (EBRD) recently revised its 2025 forecast for Kazakhstan’s GDP downward, from 5.2% to 4.9%.

EBRD Downgrades Kazakhstan’s 2025 GDP Forecast

The European Bank for Reconstruction and Development (EBRD) has revised its 2025 GDP growth forecast for Kazakhstan downward, from 5.2% to 4.9%. The adjustment was published in the bank’s May regional economic outlook. According to the EBRD, the downward revision is largely due to Kazakhstan’s GDP growth in the first quarter being driven primarily by higher oil output at the Tengiz field. While this expansion has supported short-term growth, the bank questions the sustainability of oil production as a long-term driver, particularly under current OPEC+ production limits. Oil Output and Constraints Tengizchevroil (TCO), the operator of the country’s largest oil field, increased daily production at Tengiz to a record 870,000 barrels in January 2025, up 45% from the 2024 average. Output climbed further to 950,000 barrels in March, before dipping slightly to an average of 884,000 barrels per day in early April. Industry projections suggest production may eventually reach one million barrels per day. However, the EBRD cautions that such gains may be constrained by Kazakhstan’s obligations under the OPEC+ agreement. In addition to concerns about oil production, the bank notes the risk of declining demand for Kazakh oil and metals, key exports, especially from China, one of Kazakhstan’s main trading partners. Inflation and Domestic Demand Rising inflation presents another significant challenge. Consumer prices rose 8.9% in January, 9.4% in February, and hit 10% in March, the highest level since November 2023. In April, inflation climbed further to 10.7%, raising concerns about the erosion of domestic purchasing power. Broader Economic Indicators Despite the EBRD’s revised forecast, the Ministry of National Economy reported on May 12 that Kazakhstan’s GDP grew by 6% in the first four months of 2025. For the January-March period, growth was recorded at 5.8%, supported by a range of sectors: transport (22.4%), trade (7%), agriculture (3.9%), and communications (2.6%). Growth in the transport sector was driven by an increase in freight volumes via rail and pipeline, accounting for 20.5% and 19.6% of sectoral output, respectively. Wholesale trade expanded by 7.4%, and retail trade by 6.1%. Outlook As previously reported by The Times of Central Asia, several analysts view ongoing volatility in global markets as indicative of a looming “perfect storm” for Kazakhstan’s economy. This sentiment is echoed in the EBRD’s cautious outlook, highlighting a convergence of external and internal pressures on the country's economic stability.