Economic and Political Overview

flag Kazakhstan 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

 

Economic Indicators

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 2019, Kazakh GDP grew by 4.5%, as domestic demand, business spending and construction boom supported economic activity. In 2020, Kazakhstan's economy experienced a setback due to the COVID-19 outbreak, reporting a negative growth balance of 2.6%, but came back in 2021 with a rate of + 3.3%. According to the latest IMF forecast, growth is expected to increase in 2022 and 2023, at 3.9% and 5.8% 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. In April 2020, the average oil price fell to $21 per barrel, the lowest in two decades. 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 25.2% of GDP in 2021, compared to 26.3% reported in 2020, and is expected to increase to 26.5% in 2022 and 27.6% in 2023. The country's budget deficit reached -6.6% of GDP in 2020 but was reduced to -2.7% in 2021. The IMF forecasts another increasing budget deficit of -1.3% for 2022 and -1% in 2023. Inflation rose to 6.8% in 2020 and 7.5% in 2021, but is expected to reach 6.5% in 2022 and 5% in 2023, according to the IMF's latest World Economic Outlook (October 2021).
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 decreased to 4.8% in 2021, down from 4.9% in 2019, despite the negative economic effects of the Covid-19 pandemic. According to IMF estimates, unemployment should remain stable at 4.7% in 2022 and 2023. The World Bank's Kazakhstan Economic Update estimates that the country's poverty rate has increased to 12-14% in 2020 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 20202021 (e)2022 (e)2023 (e)2024 (e)
GDP (billions USD) 171.08197.11224.34243.40254.35
GDP (Constant Prices, Annual % Change) -2.64.12.54.44.5
GDP per Capita (USD) 910111212
General Government Balance (in % of GDP) -6.7-5.0-2.0-1.9-1.0
General Government Gross Debt (in % of GDP) 26.425.123.324.425.7
Inflation Rate (%) 6.88.014.011.37.5
Unemployment Rate (% of the Labour Force) 4.94.94.94.84.8
Current Account (billions USD) -6.57-5.746.684.431.52
Current Account (in % of GDP) -3.8-2.93.01.80.6

Source: IMF – World Economic Outlook Database , Latest available data

Note: (e) Estimated Data

Main Sectors of Industry

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 6th 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 5.4% of GDP and employs 15% of the working population. 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 grown in the last few years, now accounting for 33.1% 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 56.1% 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) 5.3 33.1 55.8
Value Added (Annual % Change) 5.6 3.0 -5.6

Source: World Bank - Latest available data.

 

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Monetary Indicators 20162017201820192020
Kazakhstan Tenge (KZT) - Average Annual Exchange Rate For 1 MUR 9.639.4510.1610.7810.50

Source: World Bank - Latest available data.

 
 

Find out all the exchange rates daily on our service Currency Converter.

Indicator of Economic Freedom

Definition:

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.

Score:
71,1/100
World Rank:
34
Regional Rank:
8

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 

Business environment ranking

Definition:

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.

Score:
5.53/10
World Rank:
63/82

Source: The Economist Intelligence Unit - Business Environment Rankings 2021-2025

 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

Kazakhstan is open to international trade. According to the World Bank, the share of international trade in 2020 amounted to 56.2% of GDP. Kazakhstan has an export-oriented economy that is highly dependent on shipments of oil and related products (73 percent of total exports). In addition to oil, its main export commodities include natural gas, ferrous metals, copper, aluminum, zinc and 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% of all exports), Italy and Russia, while the main suppliers are Russia (35%), 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 depends 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 2020, total U.S.–Kazakhstan goods trade was 2.3 billion USD, with the United States holding a negative trade balance of 461 million USD.

 
Foreign Trade Indicators 20162017201820192020
Imports of Goods (million USD) 25,17529,26632,53437,75737,222
Exports of Goods (million USD) 36,77648,30460,95657,30946,447
Imports of Services (million USD) 10,9979,94911,85011,3317,969
Exports of Services (million USD) 6,2556,2617,0707,4674,837
Imports of Goods and Services (Annual % Change) -2.01.06.611.6n/a
Exports of Goods and Services (Annual % Change) -4.58.09.62.2n/a
Imports of Goods and Services (in % of GDP) 28.524.425.928.4n/a
Exports of Goods and Services (in % of GDP) 31.832.437.636.4n/a
Trade Balance (million USD) 9,25316,72825,57918,13010,506
Trade Balance (Including Service) (million USD) 5,49113,15020,91814,4147,442
Foreign Trade (in % of GDP) 60.356.863.564.9n/a

Source: WTO – World Trade Organisation ; World Bank , Latest Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2020
China 19.2%
Italy 14.2%
Russia 10.4%
Netherlands 6.7%
Uzbekistan 4.5%
See More Countries 45.0%
Main Suppliers
(% of Imports)
2020
Russia 34.9%
China 16.7%
South Korea 12.8%
Germany 4.7%
United States 3.0%
See More Countries 27.9%

Source: Comtrade, Latest Available Data

 
 

Main Products

47.0 bn USD of products exported in 2020
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 50.5%
Copper, refined, and copper alloys, unwrought ...Copper, refined, and copper alloys, unwrought (excl. copper alloys of heading 7405) 5.8%
Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons 5.3%
Radioactive chemical elements and radioactive...Radioactive chemical elements and radioactive isotopes, incl. their fissile or fertile chemical elements and isotopes, and their compounds; mixtures and residues containing these products 3.7%
Ferro-alloysFerro-alloys 3.5%
See More Products 31.3%
38.1 bn USD of products imported in 2020
Refrigerators, freezers and other refrigerating or...Refrigerators, freezers and other refrigerating or freezing equipment, electric or other; heat pumps; parts thereof (excl. air conditioning machines of heading 8415) 4.9%
Air or vacuum pumps (excl. gas compound elevators...Air or vacuum pumps (excl. gas compound elevators and pneumatic elevators and conveyors); air or other gas compressors and fans; ventilating or recycling hoods incorporating a fan, whether or not fitted with filters; parts thereof 3.5%
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses "incl. those in the form of transdermal administration" or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 3.1%
Telephone sets, incl. telephones for cellular...Telephone sets, incl. telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, incl. apparatus for communication in a wired or wireless network [such as a local or wide area network]; parts thereof (excl. than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528) 2.7%
Taps, cocks, valves and similar appliances for...Taps, cocks, valves and similar appliances for pipes, boiler shells, tanks, vats or the like, incl. pressure-reducing valves and thermostatically controlled valves; parts thereof 2.1%
See More Products 83.7%

Source: Comtrade, Latest Available Data

 
 

To go further, check out our service Import Export Flows.

 
 

Main Services

4.9 bn USD of services exported in 2020
68.16%
9.23%
8.91%
3.96%
2.86%
2.33%
2.12%
1.56%
0.83%
0.03%
0.03%
7.6 bn USD of services imported in 2020
45.99%
28.53%
10.89%
4.04%
2.79%
1.92%
1.67%
1.63%
1.56%
0.58%
0.40%

Source: United Nations Statistics Division, Latest Available Data

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Political Outline

Current Political Leaders
President:  Kassym-Jomart Tokaïev (since 20 March 2019)
Prime Minister: Alihan SMAIYLOV (since 5 January 2022)
Next Election Dates
Presidential: 2024
Senate (Upper House): 2026
Mazhilis (Lower House): 2026
Main Political Parties
The People’s Democratic Party “Nur Otan” is the most influential party and heads 84 of 98 available seats in the parliament. Opposition parties are authorised but hardly have any real chance to win power. The main political parties of the country are:

- People's Democratic Party "Nur Otan" (Light-Fatherland): centre, largest political party
- Democratic Party of Kazakhstan (Ak Zhol/Bright Path): centre, pro-reform, pro-business
- Auyl People's Democratic Patriotic Party: social democracy, agrarianism
- Communist People's Party of Kazakhstan (QKHP): opposition, left-wing
- Nationwide Social Democratic Party: less than 1% of the vote
Type of State
Kazakhstan has a presidential regime.
Executive Power
The President is the head of the State and also the Commander-in-chief of the army. He can propose constitutional amendments, appoint and revoke the government, dissolve the parliament and call for referendum when he wants. The Prime Minister is the head of the government. He and the Council of Ministers are appointed by the President.
Legislative Power
The Parliament consists of two houses. The Mazhilis, the lower house, consists of 107 members, 98 of which are elected from party lists. The remaining 9 members are appointed from the Assembly of People of Kazakhstan. The Senate, the upper house, is formed of 49 members, 34 of which are elected. The remaining 15 members are appointed by the President.
 

Indicator of Freedom of the Press

Definition:

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.).

World Rank:
155/180
Evolution:
157/180
 

Indicator of Political Freedom

Definition:

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.

Ranking:
Not Free
Political Freedom:
7/7
Civil Liberties:
18/60

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

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COVID-19 Country Response

COVID-19 epidemic evolution
To find out about the latest status of the COVID19 pandemic evolution and the most up-to-date statistics on the COVID19 disease in Kazakhstan, please visit the Kazakh government platform with the official data. Official information on the progress of the epidemic in Kazakhstan is consolidated by the Ministry of Healthcare. The ministry provides a daily epidemiological update (in Russian), which includes key national figures.

For the international outlook you can consult the latest situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.

Sanitary measures
To find out about the latest public health situation in Kazakhstan and the current sanitary measures in vigour, please consult the Kazakh government platform on COVID-19 including the up-to-date information on the containment measures put in place and public health recommendations.
Travel restrictions
The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.

The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.
Import & export restrictions
For the information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports, if applicable), please consult the portal of the Kazakh Ministry of Trade.

For a general overview of trade restrictions due to COVID-19 pandemic, please consult the section dedicated to Kazakhstan on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan
For the information on the economic recovery scheme put in place by the Kazakh government to address the impact of the COVID19 pandemic on the Kazakh economy, please visit the websites of the Kazakh Ministry of the Economy and the Ministry of Finance. The information on the Kazakh economic emergency plan is available here.

For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and  macroeconomic) taken by the Kazakh government to limit the socio-economic impact of the COVID-19 pandemic,  please consult the section dedicated to Kazakhstan in the IMF’s Policy Tracker platform.

Support plan for businesses
For the information on the local business support scheme established by the Kazakh government to help small and  medium-sized companies to deal with the economic impacts of the COVID19 epidemic on their activity, please consult  the portal of the Kazakh Ministry of National Economy and the Ministry of Finance.

For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the World Bank's Map of SME-Support Measures in Response to COVID-19.

Support plan for exporters
To find out about the support plan for exporters put in place by the Kazakh government, please consult the latest publications available on the Kazakh Ministry of Trade website.
 

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Latest Update: November 2022