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Economy

IMF Links High Inflation in Kazakhstan to Overheating Economy

The International Monetary Fund (IMF) has attributed rising inflation in Kazakhstan to signs of an overheated economy. In a mission conducted in early November, the IMF concluded that the country's GDP growth is exceeding its real potential, thereby fueling inflationary pressure. While economic activity remains robust, prices continue to climb. According to the IMF’s forecast, Kazakhstan’s real GDP is expected to grow by just over 6% in 2025, up from 5% in 2024. The main growth drivers are increased oil production and elevated domestic demand. The IMF estimates that inflation could reach nearly 13% by the end of the year. Kazakhstan’s fiscal policy remains expansionary. Transfers from the National Fund are a key contributor: in 2024, more than $12.1 billion was withdrawn from the fund, including $10.8 billion in direct transfers to the republican budget and $1.3 billion for the purchase of shares and bonds of Kazakhstani issuers. In 2025, the government plans to cut withdrawals from the National Fund nearly in half to $5.2 billion. However, the IMF warns that the non-oil budget deficit could still exceed 8% of GDP. Elevated demand, particularly from state-owned enterprises, has also contributed to a widening current account deficit, projected at 4% of GDP. Despite a slowdown in consumer lending and stabilization in oil production, domestic demand is expected to remain high in 2026. The IMF forecasts GDP growth at 4.5%. Over the medium term, the new Tax Code is expected to help bring inflation down to the 5% target, while GDP growth moderates to a sustainable level of around 3.5%. According to the National Statistics Bureau, year-on-year inflation in Kazakhstan stood at 12.9% in September 2025, easing slightly to 12.6% in October. Monthly inflation was reported at 0.5%. The IMF highlighted several risks that could exacerbate inflationary pressures. These include falling oil prices, slower economic growth among key trading partners, potential disruptions to crude exports via the Caspian Pipeline Consortium (CPC), delays in infrastructure projects, and sluggish fiscal consolidation. Nevertheless, Kazakhstan continues to maintain one of the lowest levels of public debt in the world. At 24.8% of GDP, the country ranks 25th globally in terms of debt burden.

public debt

Kazakhstan Among Countries with Lowest Debt Burden

Kazakhstan continues to maintain a low level of public debt, amounting to 24.8% of the country’s GDP, ranking it 25th globally. This figure is well below the global average and reflects a relatively low debt burden, according to an analysis by Finprom.kz based on International Monetary Fund (IMF) data. By comparison, Uzbekistan and Kyrgyzstan have higher public debt levels, at 31.1% and 37.8% of GDP, respectively. Russia (22%) and Tajikistan (23.1%) have slightly lower debt levels. Turkmenistan ranks among the top five countries globally with the lowest public debt, at just 3.9% of GDP. The IMF projects global public debt will rise to 94.7% of GDP in 2025, an increase of 2.3% year-on-year. Japan remains the country with the highest debt-to-GDP ratio at 229.6%. Other countries with high debt levels include Greece (146.7%), Bahrain (142.5%), Italy (136.8%), the Maldives (131.8%), the United States (125%), Senegal (122.9%), France (116.5%), and China (96.3%). Global public debt is expected to reach $111 trillion in 2025. The U.S. and China account for more than half of this total, with $38.3 trillion and $18.7 trillion in public debt, respectively. In absolute terms, Kazakhstan has the highest gross public debt among Central Asian countries, at $74.4 billion. It is followed by Uzbekistan ($42.8 billion), Kyrgyzstan ($7.6 billion), Tajikistan ($3.7 billion), and Turkmenistan ($2.8 billion).

State Budget

Kyrgyzstan Forecasts Five-Year Budget Surplus

The Ministry of Finance of Kyrgyzstan has published a forecast of total revenue for the next five years, indicating that by 2029, the country's state budget revenue will grow to KGS 655 billion ($7.8 billion). At the end of 2024, Kyrgyzstan's state budget surplus will amount to KGS 11.2 billion ($131.7 million), while revenue this year amounted to KGS 414 billion ($4.8 billion). As previously reported by TCA, the introduction of cash registers and the fight against crime have impacted on growth. Another contributing factor was mentioned by Head of the Cabinet of Ministers, Akylbek Japarov, who stated, “In fiscal policy, we are adopting technology that is fit for the times. Taxpayers are pleased with these changes. They no longer have to wait in queues; they can quickly file reports and receive the necessary documents online.” He also commended the promotion of domestic and foreign investments and the development of Kyrgyzstan's industrial sector which facilitate the growth of the republic's economy and, in turn, state budget revenue: “Since the beginning of 2024, 29 enterprises have been put into operation. Major projects are being implemented, such as constructing the Kambarata hydroelectric power plant and the China-Kyrgyzstan-Uzbekistan railroad. There are plans to develop the tourism sector." The Kyrgyz Finance Ministry said in a report that the annual growth in state budget revenue will provide a surplus which will be used to repay public debt. The state budget is currently projected to receive KGS 414.5 billion ($4.8 billion) in 2024, KGS 465 billion ($5.4 billion) in 2025, KGS 505 billion ($5.9 billion) in 2026, and KGS 655 billion ($7.7 billion) in 2029. In a statement to TCA, the Finance Minister explained, “Large expenditures are projected for the medium term to pay down public debt. The projected budget surplus will be used for expenditures related to activities of economic orientation and covering the state's liabilities."