Kazakhstan’s economy: fact and 2023 forecast

The First Vice Minister of National Economy – Timur Zhaksylykov announced the results of Kazakhstan’s development in January 2023 at a Government recent meeting – the real economic growth was 5.6%.

The main contribution to such significant economic growth was made by the services sector (+7.6%), and the goods sector also grew (+2.3%). Positive dynamics are observed in all major sectors of the economy.

We can significant growth compared to last year in the trade industry (+19.4%) and the communications industry (+18.1%), which is mostly due to the low base caused by the January events.

The construction industry had the best growth in the real sector. The growth of 12.5% was achieved due to increased investments in fixed assets, the construction project commissionings and continued state backing of the industry.

The industrial sector increased by 1.4% due to the positive zone transition of the mining industry (+1.2%) and continued growth of the manufacturing industry (+1.6%).

The emerging dynamics of economic development exceeded our expectations. The further development trajectory will be under many risks, such as the deterioration of the geopolitical situation, price volatility, pro-inflationary pressure in the world, and monetary policy tightening by the world Central Banks.

And the Government will continue to take measures to support the economy in these circumstances. As a result, the main drivers of subsequent development will be:

• fiscal stimulus;
• growth of investment programs and initiatives;
• increasing investments in fixed assets;
• full resumption of the mining sector;
• stable external demand and high prices for Kazakh-made goods, including oil;
• growth of the construction industry due to the implementation of new housing programs and improvement of pricing mechanisms;
• steadily growing demand for goods and services, which will positively impact the development of the trade industry.

Thus, we expect GDP growth at 3.8-4.3% level by the end of 2023, if there will not be new economic shocks.