In 2023, despite the instability of the global economy, the national economy of Kazakhstan demonstrated stability, the IMF admits in a report on the results of the fund’s mission to the country (they are carried out regularly in IMF member states). Thanks to the strict monetary policy of the National Bank of Kazakhstan, inflation slowed to 9.8% from 20.3% in 2022, and if current approaches are maintained, it will continue to decline: by the end of this year it could reach 7.7%, the IMF estimated – this , however, is still above the target 5%. The country’s GDP in 2023 increased by 4.8% (3.1% in 2022).
However, it will not be possible to maintain the current growth rates without structural reforms announced by Kazakh President Kassym-Jomart Tokayev (see Kommersant on February 8), the IMF predicts. Failure to carry them out promptly could lead to economic growth slowing to 3.1% in 2024. The World Bank (WB) has a slightly more optimistic forecast – 4.3%, which, however, also means a slowdown rather than an acceleration in growth. The authorities of Kazakhstan, let us remind you, are focusing on a more ambitious goal of 6% – this is what the country’s president outlined to the new government.
The slowdown in the growth of the Kazakh economy is largely due to lower oil prices, the postponement of the expansion of its production at the Tengiz field (one of the largest fields in Kazakhstan), as well as interruptions in oil exports through the Caspian Pipeline Consortium (see chart). The investment surge caused by the construction of the new capital, Astana, is also drying up. Additional difficulties are associated with the risk of secondary sanctions affecting Kazakh firms for supplying dual-use goods to the Russian Federation – this possibility affects the sustainability of supply chains and undermines investor confidence. The problems are aggravated by the continuing “high level of government intervention” in the economy, declining investment in mining and construction, as well as the extremely slow restructuring of the economy.
As analysts emphasize, the current economic growth forecast can be improved with the prompt and synchronized implementation of reforms, primarily those already supported by the IMF, in the budgetary, tax and investment spheres.