How has Kazakhstan’s economy changed under Tokayev’s presidency?

In March 2019, Kassym-Jomart Tokayev took over as president of Kazakhstan after Nursultan Nazarbayev, the country’s first president, voluntarily resigned. In June 2019, Tokayev won the presidential election with 70.96% of the vote. Five years into his presidency, how has Kazakhstan’s economy changed?

During this period, the nation’s economy contracted only once. In 2020, Kazakhstan’s GDP fell by 2.5% as quarantine restrictions were introduced to combat the COVID-19 pandemic, negatively impacting business activity. In other years, the economy grew at an average rate of 4.4%. However, President Tokayev set an ambitious target in 2023, announcing a goal to double Kazakhstan’s GDP by 2029, requiring an average annual growth rate of 6%. Between 2019 and 2024, the nation’s economy, measured in U.S. dollars, grew 1.6 times, from $181.7 billion to $288.1 billion. Over the same period, the nominal GDP per capita also rose significantly, from $9,800 to $14,300.

While the country has experienced overall GDP growth, concerns persist regarding the limited diversification and sophistication of its productive capabilities. The share of goods production in GDP has steadily declined over the past four years, dropping to 35.3% by the end of 2024 (down from a peak of 40.4% in 2021). Meanwhile, the service sector’s share increased proportionally, from 53.8% to 58.3% over the same period. This shift poses challenges, as labor productivity has historically grown faster in the real sector than in services. As of 2024, cumulative labor productivity growth (using 2019 as a baseline) stood at just 0.5% in the service sector, while the goods production sector saw a much stronger increase of 26.5%.

Another concerning trend in Kazakhstan’s economy is weakening investment activity. In 2019, capital investments totaled 12.6 trillion tenge (approximately $33 billion) or 18.1% of GDP. By the end of 2024, this structural indicator had declined to 14.3%, despite fixed capital investments reaching nearly $41 billion. It is no coincidence that in several recent speeches, Tokayev has urged both government officials and private sector leaders to prioritize investment in the national economy.

International organizations, particularly the World Bank, have pointed out that Kazakhstan’s economic growth in recent years has been largely driven by increased public spending. The state of Kazakhstan’s public finances, if not outright confirming this assessment, offers little evidence to dispute it.

State budget revenues grew from approximately $33.5 billion in 2019 to nearly $58 billion in 2024, accounting for 18.3% and 20.1% of GDP, respectively. Meanwhile, state budget expenditures rose from $35 billion to nearly $65 billion, with the expenditure-to-GDP ratio increasing from 19.5% to 22.4%. On average, half of state budget expenditures are financed through withdrawals from Kazakhstan’s National Fund, gradually reducing its assets, though not to a critical level yet.