IMF Staff Concludes Visit to Kazakhstan

IMF News, May 29, 2025

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Real GDP growth accelerated to 6 percent in the first four months of 2025 from 4.8 percent at end-2024.
Growth drivers: strong activity in the services, transport, construction, manufacturing, and extractive sectors.
Domestic demand supported by strong consumer credit growth and a loose fiscal stance; increased contribution from public infrastructure investment.
IMF projection for 2025: growth to moderate to about 5 percent.
IMF medium-term non-oil GDP growth projection: about 3½ percent, described as in line with current estimated non-inflationary sustainable growth.

Inflation accelerated to 10.7 percent in April 2025.
IMF projects inflation for 2025 at about 10½ percent.
Contributing factors: broad-based price pressures from domestic and external factors, including exchange rate pass-through from the depreciation of the tenge in 2024Q4.
Policy recommendation: Monetary policy should remain restrictive/tight until inflation is close to its 5 percent target.
Planned measure: Reduce excess banking system liquidity with higher reserve requirements may help ease inflation pressures over the medium term.

Fiscal stance in 2025 projected by the IMF to remain expansionary.
Non-oil fiscal deficit projected to widen from 7.9 to just over 8.0 percent of GDP in 2025.
Current account deficit expected to widen to around 3½ percent of GDP in 2025 from 1.3 percent in 2024, mainly driven by lower oil prices and sustained import demand associated with public and household spending.
2026 government plans welcomed by IMF: increase VAT rates, broaden the tax base, and adopt digitalization to improve revenue collection.
Additional IMF recommendation: Reduce widespread exemptions to further widen the tax base.
Corrective measures advised to limit fiscal deficits, help contain inflation, and support medium-term efforts to build the assets of the National Fund for the Republic of Kazakhstan.

Banks remain well capitalized, liquid, and profitable overall.
Total credit growth decelerated to about 20 percent (yoy) in March 2025.
Consumer credit remains elevated at around 31 percent (yoy).
Distressed assets related to consumer loans have increased but remain contained as a share of total assets.
IMF view: Plans to tighten macroprudential policies are welcome and should help mitigate financial stability risks from rapid consumer lending growth.
Recommendation: Monitor vulnerabilities despite broadly contained financial stability risks.

Risks are tilted to the downside; large financial buffers help mitigate these risks.
External risks: heightened uncertainties related to global trade tensions, including lower oil prices, tighter financial conditions, and slower growth in key trading partners.
Domestic risks: weaker growth from delays in large infrastructure projects and increased inflation pressures.
Upside potential: An acceleration of structural reforms and private sector development pose upside risks for medium-term growth.

Decisive implementation of structural reforms is needed to support more diversified and resilient medium-term growth.
Current investment areas: infrastructure projects, digitalization, AI, agriculture, and logistics.
IMF-recommended reforms: further reduce the state’s footprint in the economy; strengthen public governance; improve labor and product market regulations; boost economic and trade diversification.

Mission led by Ali Al-Eyd visited Kazakhstan during May 15-23, 2025.
End-of-mission press release date: May 29, 2025.
IMF note: Views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board.
IMF statement: “The IMF team is grateful to the authorities and other counterparts for their cooperation and hospitality.”

Press Release No. 25/164 — IMF Communications Department, May 29, 2025.