Kazakhstan’s economy expected to grow in 2025; President holds meet on Tariff war

Central Asia’s richest state Kazakhstan’s economic growth in 2025 will increase due to an expected rise in oil production from the launch of the Future Growth Expansion project at Tengiz, according to Asian Development Outlook (ADO) April 2025, ADB’s flagship economic publication.

Tapering in growth in 2026 is projected on the back of fiscal consolidation as anticipated increase in taxes come into effect and fiscal spending is moderated. Downside risks to the outlook include negative spillovers from global issues, as well as potential disruptions to oil export routes, ADB reported on April 9.

“Kazakhstan’s economy has been growing steadily. To ensure this growth is sustained, it is critical to strengthen public financial management and improve fiscal governance to reduce reliance on the National Fund. These measures, alongside structural reforms for private sector development, will bolster the economy’s ability to withstand external shocks,” said ADB Country Director for Kazakhstan Utsav Kumar.

Inflation is projected to slow gradually to 8.2% in 2025 and 6.5% in 2026, as tight monetary policy and a stable exchange rate help to contain price increases. The fiscal deficit is projected to widen marginally to 2.8% of GDP in 2025 and shrink to 1.7% in 2026, assuming the adoption of a government-proposed increase of the value-added tax rate and fewer exemptions. The current account deficit is expected to narrow, with higher oil output boosting merchandise exports.

ADO April 2025 highlights the need for a well-designed disaster risk finance strategy to strengthen Kazakhstan’s institutional preparedness for disaster response. A risk-layered strategy would enhance the country’s financial readiness and provide the government with quick access to necessary resources to ensure timely relief and early recovery.

The growth forecasts were finalized before the April 2 announcement of new tariffs by the U.S. administration, so the baseline projections only reflect tariffs that were in place previously.

However, ADO April 2025 does feature an analysis of how higher tariffs may affect growth in Asia and the Pacific.

Kazakhstan joined ADB in 1994, and the bank has committed loans, grants, and technical assistance amounting to over $7.5 billion to the country in public sector management, finance, energy, transport, and other sectors.

Meanwhile, Kazakhstan President Kassym-Jomart Tokayev held a meeting on April 9 with Prime Minister Olzhas Bektenov, National Bank Governor Timur Suleimenov, and other officials on the economic situation regarding the collapse of global energy prices and basic goods on world markets due to tariff conflicts.

Tokayev instructed the government and local executive bodies to finalize an action plan in the shortest possible time to respond to the financial and economic crisis, preventing a decrease in the growth rate and volume of attracted investments.

The priorities of Kazakhstan’s economic development, including large infrastructure projects, digitization, artificial intelligence, modernization of agriculture and the transport and logistics sector, will be implemented despite the unfavorable situation, Tokayev stressed. He will hold another meeting on this issue next week.