Kazakhstan: Economic and Political Overview
In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline | COVID-19 Country Response
For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.
Kazakhstan's economic growth is largely based on gas and oil revenues (around 35% of GDP and 75% of exports). In 2021, Kazakh GDP grew by 4.1%, as domestic demand, business spending and construction boom supported economic activity, but came down to 2.5% in 2022. According to the latest IMF forecast, growth is expected to increase in 2023 and 2024, at 4.4% and 4.5% of GDP respectively.
The COVID-19 pandemic fallout has affected the economy more than the 2008 and 2015 crises. The pandemic halted global activity in the second quarter of 2020, and depressed global demand and oil prices. Despite the government's diversification efforts, Kazakhstan is still dependent on oil prices and the economy relies heavily on hydrocarbon exports. This has made the economy even more vulnerable. Public debt reached 25.1% of GDP in 2021 and 23.3% in 2022, and is expected to increase to 24.4% in 2023 and 25.7% in 2024. The country's budget deficit reached -5% of GDP in 2021 but was reduced to -2% in 2022. The IMF forecasts another budget deficit of -1.9% for 2023 and -1% in 2024. Inflation rose to 8% in 2021 and more than 14% in 2022, but is expected to reach 11.3% in 2023 and 7.5% in 2024, according to the IMF's latest World Economic Outlook (January 2023).
Since 2015, Kazakhstan has been a member of the Eurasian Economic Union (with Russia, Belarus, Armenia and Kyrgyzstan), which could eventually be used to facilitate economic diversification. Kazakhstan is turning more to China for its development needs, while China needs the country to develop its "Silk Road" project: a railway terminal was opened on the Chinese side of the border in 2015. Anti-Chinese sentiment grew in the country in 2019 with sporadic mass protests against a backdrop of a perceived Chinese takeover of domestic economy. This sentiment remain very much present in 2022. Kazakhstan halted oil exports to China at the start of 2020 after discovering contaminated material in crude flows to China. The new Kazakh president Kassym-Jomart Tokayev now seeks to strengthen economic ties with China.
Emerging challenges include weakening global demand for fossil fuels, greater regional competition to attract investment, increased risks of instability in the financial sector and more need for accountable and transparent governance.
Unemployment rate remained stable at 4.9% in 2022, despite the negative economic effects of the Covid-19 pandemic. According to IMF estimates, unemployment should remain at 4.8% in 2023 and 2024. The World Bank's Kazakhstan Economic Update estimates that the country's poverty rate has increased to 12-14% in 2022 from a baseline of 6% in 2016. The government has implemented a substantial amount of direct support to businesses through tax deferrals and subsidised loans, and financial support to poor households and affected individuals. Volatile oil prices and uncertainty over the scale of global demand for hydrocarbons are other risks that could weaken export and pressure exchange rate. The recent increase in housing prices also makes home ownership less affordable and a steady rise in mortgage lending along with lifting of forbearance measures could expose the banking sector to higher NPLs in the event of future shocks. Moreover, with the heavily reliant on hydrocarbons, the country faces challenges arising from the emissions reduction and low-carbon transition (World Bank, 2022).
| Main Indicators | 2020 | 2021 | 2022 (E) | 2023 (E) | 2024 (E) |
|---|---|---|---|---|---|
| GDP (billions USD) | 171.08 | 197.11 | 225.78 | 245.70 | 259.68 |
| GDP (Constant Prices, Annual % Change) | -2.6 | 4.1 | 3.2 | 4.3 | 4.9 |
| GDP per Capita (USD) | 9,063 | 10,107 | 11,440 | 12,307 | 12,866 |
| General Government Balance (in % of GDP) | -6.7 | -5.1 | 0.1 | -1.9 | -1.1 |
| General Government Gross Debt (in % of GDP) | 26.4 | 25.1 | 23.5 | 25.9 | 27.0 |
| Inflation Rate (%) | 6.8 | 8.0 | 15.0 | 14.8 | 8.5 |
| Unemployment Rate (% of the Labour Force) | 4.9 | 4.9 | 4.9 | 4.8 | 4.8 |
| Current Account (billions USD) | -7.59 | -7.86 | 6.26 | -4.72 | -5.07 |
| Current Account (in % of GDP) | -4.4 | -4.0 | 2.8 | -1.9 | -2.0 |
Source: IMF – World Economic Outlook Database , Latest available data
Note: (e) Estimated Data
Kazakhstan benefits from multiple natural resources. Major deposits of oil, natural gas, coal, iron ore, manganese, chromium ore, nickel, cobalt, copper, lead, zinc, bauxite or uranium. The country also has a large agricultural area (ranked 14th world), composed of arable land and pastures. Agriculture suffered from a strong decline in the aftermath of the fall of the Soviet Union, but has recovered in the last 20 years. The sector accounts for 5% of GDP and employs 15% of the working population World Bank data, 2023). Agriculture in the country is extensive, but ageing infrastructure limits its development. More than half of the products are vegetable crops (cereals, including wheat, oilseeds, cucurbits). Kazakhstan is one of the world's leading wheat producers. Livestock and dairy industries account for a significant share of the agricultural sector. Kazakhstan is almost self-sufficient in agri-food.
The Kazakh industry has been growing in the last few years, now accounting for 35.3% of GDP and employing 21% of the working population. Metallurgy of ferrous and non-ferrous metals, hydrocarbon production, textiles, chemicals and pharmaceuticals and fertilizers are the main industrial products.
The tertiary sector is the main sector in Kazakhstan and growing steadily. It accounts for 53.9% of GDP and employs 64% of the working population. The financial sector, transport and technology are the main services produced in the country. The tourism sector, although not yet very developed, was experiencing strong growth. Unfortunately, the Covid-19 pandemic halted this development. Moreover, the pandemic has hit severely retail, hospitality, wholesale, and transport sectors, which account for around 30% of employment, and are mostly concentrated in cities.
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
|---|---|---|---|
| Employment By Sector (in % of Total Employment) | 14.9 | 21.0 | 64.2 |
| Value Added (in % of GDP) | 5.0 | 35.3 | 53.9 |
| Value Added (Annual % Change) | -2.2 | 5.1 | 4.4 |
Source: World Bank - Latest available data.
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| Monetary Indicators | 2016 | 2017 | 2018 | 2019 | 2020 |
|---|---|---|---|---|---|
| Kazakhstan Tenge (KZT) - Average Annual Exchange Rate For 1 MUR | 9.63 | 9.45 | 10.16 | 10.78 | 10.50 |
Source: World Bank - Latest available data.
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The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation
The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.
Source: The Economist Intelligence Unit - Business Environment Rankings 2021-2025
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Kazakhstan is open to international trade. According to the World Bank, the share of international trade in 2021 amounted to 58% of GDP (World Bank, 2023). Kazakhstan has an export-oriented economy that is highly dependent on shipments of oil and related products (57.2% of total exports). The country has been recording trade surpluses since 1998 mainly due to rise in shipments of oil and other commodities.In addition to oil, its main export commodities include natural gas, ferrous metals, copper, aluminum, zinc, uranium. Kazakhstan's main export products are raw materials, notably oil, petroleum products, coal, iron ore, machinery. Cereals, wool and meat are other major exports. The country imports mainly machinery, nuclear reactors, boilers, Electrical, electronic equipment, and radiotelephone transmitting devices.
Kazakhstan's main international customers are China (19.2% of all exports), Italy and Russia, while the main suppliers are Russia (34.9%), China, South Korea and Germany. Russia and Kazakhstan have undertaken joint projects in many areas, including energy. The government aims to improve the country's integration abroad to increase investment in the country. The country has been a WTO member since 2015 and has trade agreements with many countries in its region. It is also a member of the Eurasian Economic Union (Russia, Belarus, Armenia, Kyrgyzstan and Kazakhstan), and the Common Economic Zone (Belarus and Russia). The Enhanced Partnership and Cooperation Agreement (EPCA) was signed in 2015 between the country and the European Union, and a revised version entered into force in March 2020.
As oil and gas are among Kazakhstan's main exports, the country's trade balance is affected by global commodity prices. Kazakhstan’s total foreign trade turnover amounted to 91.3 billion USD over the period from January through November 2021, an increase of 15.4% compared to 79.1 billion USD during the same period last year. This means that the EU accounts for 31% of all Kazakh foreign trade. The increase is trade has largely been due to the increased amount of freight moving across Eurasia from China to Europe, with the trans-Kazakh route one of the heaviest used. Kazakh imports from China usually arrive by the same rail route and reached about US$8 billion in value in 2021. With these containers being offloaded at Kazakhstan, space is then available for Kazakh goods to continue west to Europe. Kazakhstan’s Statistics Committee has stated that Kazakhstan’s trade with the countries of the European Union reached 28.4 billion USD during the period January – November 2021, which is a 25.6% increase over the 22.6 billion USD achieved during the same period in 2020 (Silk road briefing, 2022). In 2021, total U.S.–Kazakhstan goods trade was 2.65 billion USD, with the United States holding a negative trade balance of 1.56 billion USD.
Kazakhstan recorded a trade surplus of 1309.10 USD Million in December of 2022 (Agency of Statistics of the Republic of Kazakhstan, 2023).
| Foreign Trade Indicators | 2017 | 2018 | 2019 | 2020 | 2021 |
|---|---|---|---|---|---|
| Imports of Goods (million USD) | 29,266 | 32,534 | 37,757 | 37,222 | 41,171 |
| Exports of Goods (million USD) | 48,304 | 60,956 | 57,309 | 46,447 | 60,625 |
| Imports of Services (million USD) | 9,949 | 11,850 | 11,331 | 7,969 | 7,664 |
| Exports of Services (million USD) | 6,261 | 7,070 | 7,467 | 4,837 | 5,814 |
| Imports of Goods and Services (Annual % Change) | 1.0 | 6.6 | 14.9 | -9.0 | -2.7 |
| Exports of Goods and Services (Annual % Change) | 8.0 | 9.6 | 2.0 | -11.3 | 2.0 |
| Imports of Goods and Services (in % of GDP) | 24.4 | 25.9 | 28.4 | 26.5 | 24.0 |
| Exports of Goods and Services (in % of GDP) | 32.4 | 37.6 | 36.4 | 30.5 | 33.5 |
| Trade Balance (million USD) | 16,300 | 24,839 | 17,044 | 9,249 | 18,756 |
| Trade Balance (Including Service) (million USD) | 12,722 | 20,178 | 13,380 | 6,137 | 16,936 |
| Foreign Trade (in % of GDP) | 56.8 | 63.5 | 64.9 | 57.0 | 57.5 |
Source: WTO – World Trade Organisation ; World Bank , Latest Available Data
| Main Customers (% of Exports) |
2022 |
|---|---|
| Italy | 16.4% |
| China | 15.6% |
| Russia | 10.4% |
| Netherlands | 6.5% |
| Türkiye | 5.6% |
| See More Countries | 45.5% |
| Main Suppliers (% of Imports) |
2022 |
|---|---|
| Russia | 34.7% |
| China | 21.9% |
| Germany | 4.5% |
| United States | 3.8% |
| Türkiye | 3.2% |
| See More Countries | 31.9% |
Source: Comtrade, Latest Available Data
Source: Comtrade, Latest Available Data
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Source: United Nations Statistics Division, Latest Available Data
The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House
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Latest Update: September 2023
