Expanding economic conditions prevail.
Kazakhstan's Economy: Diversification and Growth Push in 2025
In an impressive move, Kazakhstan's economy has thrived in the first four months of 2025, racking up a real GDP growth of 6%. This surge outshines the growth witnessed in the same period in 2024, a significant leap forward.
According to preliminary data from the Agency for Strategic Planning and Reforms of the Republic of Kazakhstan, key sectors like transport, trade, agriculture, communications, and construction have shown remarkable acceleration. Notably, transport saw a growth of 22.4%, while trade followed closely with a 7% increase.
The construction sector has made substantial progress, too, with an index of physical volume of work at 16.2%. The sector is bustling with commissions for 4.9 million square meters of housing and significant building projects for schools, engineering networks, and roads.
Industry also contributed to the robust growth, with the production index reaching 6.4%. The mining sector, in particular, boasted a 7.1% growth, mainly due to an increase in coal production by 11.2%. In the processing industry, food production, tobacco products, chemical products, and machinery all saw growth.
Notably, key products like sunflower oil, flour, sugar, rice, natural uranium, gasoline, diesel fuel, concrete, fertilizers, steel, cast iron, flat rolled products, freight cars, diesel locomotives, and railway locomotives have all experienced increased production.
Agriculture has also displayed positive dynamics, with an index of gross output of 3.9%. The government's support for business, including preferential financing, is designed to drive this growth further.
This growth spurt confirms the effectiveness of Kazakhstan's diversification efforts, which combine an industrial leap with a revival of services and construction's multiplier effect. However, to maintain this success, the government needs to address the challenge of enhancing competitiveness through modernization, innovation, and the expansion of export markets.
Experts view this shift as a promising sign, indicating that the long-discussed diversification is finally moving from plans to action. To consolidate this success, the government must prioritize infrastructure development, facilitate convenient export access, and provide affordable financing for small and medium-sized businesses.
According to ranking.kz financial analyst Rasul RYSMBAMBETOV, the country's growth in the coming years is likely to be driven by sectors like logistics, storage, agriculture, and the mining-metallurgical complex with in-country deep processing. Astute strategies like investment incentives, SME support, infrastructure modernization, innovation, and a focus on the EU market will be instrumental in achieving this goal.
Kazakhstan's commitment to diversification, modernization, innovation, and expanding export markets is a step towards creating a more resilient, diverse, and competitive economy that can sustainably grow and innovate in the global market.
Insights:- Kazakhstan's aim is to reduce reliance on oil and expand into sectors like critical minerals and processed goods[1].- The government supports SME growth with targeted reforms, European investment, and state-backed guarantees worth nearly €18 billion by 2027[3].- Kazakhstan has launched a Golden Visa program, offering 10-year residency for foreign nationals who invest US$300,000 in local companies or securities, with the goal of attracting international capital[5].
[1] BBC News: Kazakhstan approves strategic program for national media (2022)[2] Eurasia Center: What China's Transport Policies Mean For Central Asia (2023)[3] Reuters: Kazakhstan pins hopes on SMEs to boost growth, reduce reliance on foreign firms (2024)[4] about.baiterek: Baiterek National Managing Holding NMH JSC Central Asia's Leading Development Finance Institution (n.d.)[5] InvestKZ: Business Immigration Program (n.d.)
Finance plays a crucial role in Kazakhstan's growth strategy, with the government providing affordable funding for small and medium-sized businesses to drive diversification and expansion into sectors like logistics, storage, agriculture, and the mining-metallurgical complex.
Businesses in these sectors, such as logistics and agriculture, are expected to be key drivers of Kazakhstan's growth in the coming years, with astute strategies like investment incentives, SME support, infrastructure modernization, innovation, and a focus on the EU market being instrumental in achieving this goal.
