IMF: Kazakhstan's Economic Growth Faces Challenges Amid Inflation and Oil Price Decline

The International Monetary Fund (IMF) has adjusted its economic outlook for Kazakhstan, projecting a moderation in growth and highlighting persistent inflationary pressures, Orda.kz reports.

According to the IMF's recent mission to Kazakhstan, real GDP growth accelerated to 6% in the first four months of 2025, up from 4.8% at the end of 2024. This growth was driven by strong activity in services, transport, construction, manufacturing, and extractive sectors.

However, for the full year 2025, the IMF projects growth to moderate to about 5%, reflecting slower growth in trading partners and spillovers from lower global oil prices to non-oil activity. 

Inflation remains a concern, with rates accelerating to 10.7% in April 2025. The IMF projects inflation to remain around 10.5% for the year, influenced by both domestic and external factors. The IMF recommends that monetary policy should remain tight until inflation is close to its 5% target. 

Fiscal and external deficits are expected to widen in the context of lower oil prices. The IMF projects the non-oil fiscal deficit to increase from 7.9% to just over 8.0% of GDP in 2025. Plans to increase VAT rates, broaden the tax base, and adopt digitalization to improve revenue collection are welcomed by the IMF. 

The IMF also notes that Kazakhstan's banking sector remains well-capitalized and liquid. However, the volume of problem assets related to consumer loans has increased, though their share in the total volume of assets has changed insignificantly. 

The IMF emphasizes the need for Kazakhstan to maintain a tight monetary policy, implement fiscal reforms, and invest in infrastructure and digitalization to support sustainable economic growth.

Original Author: Nikita Drobny