Halyk Finance predicts 5.3% GDP growth in Kazakhstan

According to Saltanat Igenbekova, an analyst at Halyk Finance, Kazakhstan’s GDP growth will reach 5.3% by the end of the year, which is 0.5 percentage points higher than the rate at the end of 2024 (4.8%). This forecast is based on the strong performance of the first quarter (5.8%) and the record growth of the short-term economic indicator (SEI; 8.3%).

The SEI reflects the change in the physical production volume in key sectors of the country’s economy and includes more than 60% of Kazakhstan’s GDP. The indicator is calculated in monetary terms. At the end of the quarter, the SEI reached a 10-year high of 8.3% year-on-year (YoY). The analyst believes that this impetus could facilitate the GDP growth further.

The economic growth, primarily driven by the transportation (+21.0%) and construction (+16.9%) sectors, was observed in almost all industries within the SEI structure, except for the communications sector (-0.4% YoY).

«That being said, these two industries combined account for just about 11% of the country’s GDP. Industries that represent a more significant share of GDP — the trade (-6.3%) and industrial (-6.7%) sectors — showed more moderate growth,» Halyk Finance emphasized.

Additionally, investments in fixed assets showed a 6.3% growth in the first quarter of 2025, driven by the increase in building construction investments (+21.5%), while equipment costs, on the contrary, decreased by 14.5%.

Furthermore, the state’s share in fixed capital investments rose to 22% in the first quarter, increasing by 2.6 times in absolute terms. Excluding these public funds, the volume of investments decreased by 8.3%, pointing to the instability of economic growth and its dependence on state support, the Halyk Finance analyst said.

Even though Kazakhstan’s oil output exceeded OPEC+ quotas throughout Q1, its oil exports dropped by 21% in monetary terms, the analyst emphasized. In March, average daily production (about 1.852 million barrels per day) exceeded February’s figures (1.816 million barrels).

«Given that Kazakhstan is obliged to compensate for overproduction under its OPEC+ quotas, average daily oil output will decrease from April. It is likely to affect the mining and manufacturing sectors’ growth in the following periods,» Igenbekova underlined.

Earlier this month, a representative of the National Bank noted that there is a time lag of up to three months between the actual supply of oil for export and its reflection in customs statistics. In other words, oil transactions reflected in the statistics for Q1 of 2025 took place in Q4 of 2024. In addition, when calculating the size of the oil industry in the GDP structure, only the cost of oil at the time of its production, as well as transportation tariffs by KazTransOil, the national operator of the oil pipeline system, are taken into account.

According to the expert, the projected GDP growth of 5.3% will be driven by the planned increase in oil production, fiscal incentives and the implementation of large-scale infrastructure projects. However, as global trade tensions are increasing, oil prices are unstable and OPEC+ could introduce new production restrictions, these forecasts might be adjusted soon.

Igenbekova also emphasized that economic growth in Kazakhstan might be hindered by several factors, including a drop in oil prices, restrictions on oil production, continued tight monetary conditions, a decrease in investment and lower productivity. The GDP growth forecast could also be affected by surging trade conflicts between key global powers.

In turn, the government of Kazakhstan anticipates the country’s economy to grow at 5.6% this year, primarily due to further growth in the manufacturing sector, budget incentives and increased oil production. At the same time, 67% of businessmen surveyed by PwC expect that this year’s economic growth in Kazakhstan will be higher than last year’s figures (4.8%). However, the vast majority of them (83%) are convinced that this increase won’t be significant.