Kazakhstan’s Economy Grows — But Real Incomes Are Falling

High inflation and a weakening tenge are eroding the purchasing power of Kazakhstanis in 2025, even as the government reports economic growth, Orda.kz reports.

According to Saltanat Igenbekova, chief analyst at Halyk Finance, real incomes grew just 1.1% in the first quarter and have been declining since May.

Nominal earnings are rising on paper, but inflation is outpacing wage growth.

In the first half of 2025, per capita nominal income amounted to 226,600 tenge. Nominal growth of 9.3% failed to offset inflation, which remained at double-digit levels,Igenbekova notes.

She points out that official income figures exclude most small and medium-sized businesses, which make up 84% of active legal entities. When those workers are accounted for, real wages rose only 0.3% in the first half of the year.

Three sectors — finance (955,000 tenge), mining (889,000), and IT (820,000) — lead in earnings but employ just 6% of the workforce. More than half of workers are in lower-paid sectors such as healthcare, education, administration, and public service.

In healthcare, education, administrative services, and public administration, which employ more than 56% of employees, below-average wages are observed. Moreover, in these sectors, wages are declining in real terms: in education by 3.1% year-on-year, in administrative services by 7.2%, and in healthcare by 3.1%,says Igenbekova.

Kazakhstan now ranks last among EAEU countries for wage growth when adjusted for inflation.

Pensions are also losing value. Despite an increase in the minimum basic pension to 70% of the subsistence minimum, real payouts fell 2.8% to 143,500 tenge.

Inflationary pressure is offsetting basic pension indexation programs, and the real purchasing power of pensioners is declining, Igenbekova says.

Spending is also shrinking. In the second quarter, average monthly expenditures were 311,100 tenge against an income of 359,600. Consumer loans rose 32% in the first quarter, suggesting households are increasingly borrowing to cope.

Food now accounts for 52.5% of household spending — up from 51.7% a year earlier.

Food products dominate the household spending structure. The share of household spending on food increased from 51.7% in the second quarter of 2024 to 52.5% in the second quarter of 2025. Non-food items accounted for 20.3% of all spending, paid services accounted for 18.5%, and loan and debt repayments accounted for 6.5%, Igenbekova reports.

Low economic complexity and labor productivity generally determine low wages. The raw materials model, dominated by extractive industries — where wages are significantly higher than in many other sectors — creates a sectoral imbalance. Although high incomes in the mining sector increase the average wage nationally, low wages in other sectors limit the overall income level of a portion of the population, which, in turn, affects consumption patterns, explains a Halyk Finance analyst .

Her outlook is pessimistic: without policy changes, debt levels will rise and quality of life will continue to decline.

Analysts say the government needs to overhaul social support, expand access to financial services, and shift toward sustainable economic growth.

Original Author: Nikita Drobny