Kazakhstan macro: the economy reportedly accelerates, prompting forecast upgrades

KAZAKHSTAN - Report 20 Jun 2025 by Evgeny Gavrilenkov

The recently published macroeconomic statistics suggest that the Kazakh economy continued to expand steadily in 5M25, and its rate of growth has reportedly accelerated. One cannot rule out that a weaker tenge helped as the USD/KZT has traded above the 500 mark for several months. This has not only supported some domestic manufacturers, but has also helped collect more revenue for the republican budget as the latter depends on oil and exchange-rate-related revenue (in contrast to local budgets). On top of that, the current account appeared in surplus in 1Q25 ($669.8 mln) as opposed to the $3.7 bln deficit for 2024 as a whole. Hence the tenge’s delayed correction this year proves once again that the authorities cannot withstand the pressure caused by fundamental factors indefinitely. The 5M25 republican budget execution statistics show that this year, revenue appeared well above that of 5M24 thanks to a weaker tenge. In general, both balances, i.e., the foreign trade and the budget, appear stable and suggest no threat to macroeconomic stability.

Several international financial institutions and local authorities have published upwardly revised 2025 GDP growth forecasts in recent weeks, as economic growth looked stronger than expected in the last few months. For example, the short-term indicator (the monthly print of economic activity) suddenly jumped by 8.6% y-o-y in 5M25—a rate last seen in the aftermath of the deep fall in 2009. Hence, the 5M25 short-term-indicator’s growth looks a bit suspicious given that some segments grew fast, while others did not. However, strong revenue flow to the local budgets suggests that economic growth may have meaningfully accelerated. Given that the authorities have already started amending the budget (the combined local one) and expenditures will increase in 2H25, consumer demand will look stronger for the rest of the year. However, disinflation will likely be slow.

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