Experts Say Kazakhstan Must Boost Manufacturing to Tame Inflation

Inflation is steadily eroding incomes in Kazakhstan, depleting savings and undermining government efforts in the social sector. The Times of Central Asia previously noted that surging economic growth could be a contributing factor to Kazakhstan’s inflation problem. But despite rising prices, the government has no plans to apply the brakes. On the contrary, officials point to promising GDP growth driven by sectors beyond oil. Meanwhile, independent experts argue that only large-scale industrial development can provide a lasting solution to inflation. Persistent Price Pressures Inflation continues to outpace official projections. In August, annual inflation hit 12.2%, and by the end of 2025 it is expected to reach 14%, well above the National Bank of Kazakhstan’s target range of 5-6%. Economists say the country’s dependence on imports is a key driver. Kazakhstan imports large volumes of food, fuel, medicine, equipment, and consumer goods. Wage and pension increases are failing to keep pace with the surge in prices. President Kassym-Jomart Tokayev has acknowledged that high inflation poses a serious challenge, warning it is “eating away at economic growth and household incomes.” Government efforts to stabilize prices have yet to show meaningful results. On September 23, Minister of Trade and Integration Arman Shakkaliev announced that Kazakhstan will gradually phase out price controls on socially significant food products (SZPT) in favor of targeted digital support for consumers. The SZPT list currently includes 19 essential items. At the same time, Prime Minister Olzhas Bektenov instructed agencies to crack down on unjustified price hikes for basic goods, ordering strict enforcement of available price control tools. Growth at a Cost Inflation, according to Deputy Prime Minister and Minister of National Economy Serik Zhumangarin, is being fueled by economic expansion. He warned that efforts to restrain inflation could hinder growth. “Since 2023, GDP has grown by 5%, and in 2024 we grew without the contribution of oil. This year is a turning point. From 2026, oil will no longer influence GDP growth,” Zhumangarin said. Although Kazakhstan’s economy has long relied on oil revenues, the minister believes this trend is now shifting. “Economic growth is always accompanied by high inflation,” he said. “More than $12 billion in investments have already been attracted, and the target for the year is $24 billion. The government will soon announce a new strategy for economic growth. We must follow the path of Asian countries but with modern technologies.” Call for Industrialization Independent analysts argue that real progress against inflation requires mass domestic production across a wide range of goods. Political analyst Gaziz Abishev stressed the urgency of moving beyond megaprojects toward practical, infrastructure-linked industry. “Kazakhstan needs real production, not fairy-tale megaprojects. Industry tied to infrastructure, logistics, human resources, and markets solves many issues,” he wrote. “It creates well-paid jobs, stimulates small and medium-sized businesses, reduces reliance on imports, supports the tenge, and addresses budget deficits.” Abishev also called for openness to foreign industrial investment, regardless of origin. His comments appear to push back against public concerns over the influence of Russia, China, and Western...

Kyrgyz Authorities Take Action to Curb Rising Food Prices

Kyrgyzstan’s Deputy Prime Minister Bakyt Torobaev has directed key government agencies to implement urgent measures aimed at stabilizing prices for socially significant food products. According to official information, the government’s list of essential goods includes meat, vegetable oil, flour, potatoes, sugar, carrots, onions, and other staples, totaling 50 items. Torobaev’s directive includes enhanced monitoring of price fluctuations, tighter oversight of food imports and exports, and a focus on inflation risk mitigation. He has called for the development of short-term mechanisms to contain price increases. The Antimonopoly Regulation Service and the National Statistics Committee have been tasked with conducting daily price monitoring in major cities. The State Tax Service has been instructed to explore the possibility of reducing VAT on imported food products. In parallel, the National Bank of Kyrgyzstan is expected to design preferential loan mechanisms for agricultural producers and livestock breeders. Torobaev emphasized the urgency of these measures, noting that approximately 65% of the population derives income from agriculture, and that expanded state support is critical to economic stability. In Bishkek, the government plans to open municipal pavilions where essential food items will be sold at fixed prices. If successful, the model will be scaled to other regions as part of broader anti-crisis efforts. “The Cabinet of Ministers is continuously working on implementing and overseeing a unified pricing policy,” said Torobaev. According to the National Statistics Committee, Kyrgyzstan’s consumer price index rose by 4% in the first half of 2025. Food prices increased by an average of 6%, with potatoes showing the steepest rise, nearly 50%, during the same period.