Kazakhstan macro: GDP growth to moderate this year

KAZAKHSTAN - Report 21 Apr 2026 by Evgeny Gavrilenkov

According to the Bureau of National Statistics, economic trends looked better in March as the economy continued to recover from the January shock caused by disruptions in oil exports (and accordingly, extraction) due to the damaged CPC oil pipeline terminal. Still, in 1Q26 as a whole, economic growth slowed markedly on a y-o-y basis. As m-o-m and q-o-q chain indices are unavailable in Kazakhstani statistics for many indicators, and in those cases when they exist, they may not match the y-o-y data, it is difficult to estimate the economy’s short-term dynamics and foresee future short-term trends with decent accuracy.

At the same time, budget execution statistics can give more color and provide additional information about the economy’s growth trajectory. However, due to the tax reform, all previous tax collection trends and their links to economic growth have changed, which complicates the analysis. Nonetheless, putting together all the available statistics, we believe that this year, in the aftermath of last year’s acceleration of economic growth, the economy is likely to return to its previous long-term GDP trajectory and grow by up to 5%. Another conclusion that one can derive from the available data is that the VAT reform was generally successful—even though 1Q26 VAT collection lagged the quarterly plan. The republican budget was the main beneficiary of the reform. Meanwhile, the appreciation of the tenge (to about USD/KZT 476 as of this writing) trimmed revenues associated with the exchange rate, as the 2026 budget had assumed the USD/KZT to remain at 540 on an average annual basis.

The situation on the local level appears different from previous years, when actual tax collection was consistently ahead of plan. In 1Q26, tax revenues of the local budget lagged and amounted to 21.4% of the annual plan. As these taxes are not linked to the exchange rate directly, this relatively poor tax revenue flow correlates with slowing economic activity. Despite certain shortcomings on the revenue side, the combined local and republican budget deficit was low, as the government delayed spending of about KZT4.1 trln (out of KZT32.5 trln planned for this year). Once this money comes into the system, it may create additional inflationary pressure.

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