Kazakhstan: Staff Concluding Statement for the 2025 Article IV Mission
IMF News, November 21, 2025
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Bibliographic details
- Published: November 21, 2025
Mission context and timing
- An IMF mission led by Mr. Ali Al-Eyd conducted discussions for the 2025 Article IV consultation with Kazakhstan during November 6-19, 2025, in Almaty and Astana.
- Statement issued November 21, 2025, summarizing the mission’s main conclusions and recommendations.
Recent developments, outlook, and risks
- Economic activity and growth
- Real GDP growth is projected at just above 6 percent in 2025, up from 5 percent in 2024, driven by rising oil output and strong domestic demand.
- Growth is expected to remain strong in 2026 before moderating over the medium term: overall real GDP growth of about 4½ percent in 2026 and around 3½ percent over the medium term.
- Inflation
- Inflation is projected to be close to 13 percent at the end of this year.
- Inflation is expected to remain elevated at around 11 percent in 2026.
- Over the medium-term, inflation is projected to gradually decline to the National Bank of Kazakhstan’s (NBK) target of 5 percent.
- Fiscal and external balances
- The fiscal stance remains loose, with the non-oil deficit projected at over 8 percent of GDP in 2025, supported by large transfers from the National Fund of the Republic of Kazakhstan (NFRK).
- The current account deficit is projected to be around 4 percent of GDP this year.
- Key downside risks (largely external)
- Growth slowdown or renewed inflation pressures in major trading partners.
- Lower oil prices or major, sustained disruptions to oil exports through the Caspian Pipeline Consortium (CPC) pipeline.
- Key domestic risks
- Potential delays in implementing infrastructure projects and fiscal consolidation.
- Higher-than-expected inflation prompting further monetary policy tightening.
- Acceleration of large infrastructure projects financed through state-subsidized schemes poses upside risks to growth and inflation.
Policy mix — overarching guidance
- Enhanced policy collaboration is needed to decrease inflation pressures and lay the foundations for more sustainable growth.
- A more restrictive overall macroeconomic policy mix is recommended to:
- Contain fiscal and large quasi-fiscal activities.
- Dampen excess domestic demand pressures and inflation.
- Reduce fiscal and external deficits and build financial buffers.
- Structural reforms are needed to reduce the role of the state and promote private sector activity to achieve sustainable trend growth with lower inflation.
- Mission notes the announced “Joint Action Program of the Government, NBK, and the Agency for Regulation and Development of the Financial Market (ARDFM) on Macroeconomic Stabilization and Improving Public Welfare for 2026–2028” and looks forward to studying the program.
Monetary policy recommendations
- Maintain tight monetary policy and more effective liquidity management amid persistent inflation pressures.
- Mission welcomed:
- The NBK’s recent policy rate increase.
- The gradual phasing-in of higher minimum reserve requirements to absorb structural banking system liquidity.
- NBK should:
- Continue a sufficiently restrictive monetary stance until inflation is close to its target.
- Deliver further policy rate hikes should inflation increase.
- Additional liquidity-absorption measures to consider:
- Coordinated issuance of short-term notes by the NBK and treasury bills by the Ministry of Finance.
- Benefits cited: strengthen monetary transmission, enhance government cash management, support domestic capital market development.
Fiscal policy recommendations
- Welcome government plans for fiscal consolidation next year but urge additional efforts to ensure an overall restrictive public sector stance.
- The new tax code is an important step to reduce the non-oil deficit; effectiveness should be bolstered by phasing out tax exemptions.
- Concerns:
- Substantial quasi-fiscal activities of SOEs could largely offset consolidation in the state budget, likely resulting in an overall positive fiscal impulse to the economy.
- Recommended design of off-budget activity:
- Gradual and carefully calibrated to ensure a restrictive overall macroeconomic policy mix.
- Minimize additional inflation pressures and avoid crowding out private sector activity.
- Medium-term fiscal framework priorities:
- Entrench fiscal rules in the new budget code that limit expenditure growth and transfers from the NFRK.
- Further strengthen rules by incorporating a long-term anchor, such as a debt limit.
- Improve reporting and monitoring of SOEs and produce public sector data fully aligned with international standards.
Financial sector stability
- Overall assessment
- The banking system is sound: banks remain well capitalized, liquid, and profitable; non-performing assets are at low levels.
- Risks and recommended measures
- Rapid consumer credit growth raises concerns about weakening underwriting standards and household over-indebtedness.
- Planned prudential measures welcomed; these should be underpinned by the collection and publication of data on household indebtedness and be well-targeted to limit disintermediation risks.
- FSAP and regulatory priorities
- Good progress has been made in implementing key 2023 Financial Sector Assessment Program (FSAP) recommendations.
- Going forward, priorities include:
- Enacting the new Banking Law.
- Establishing capacity to operationalize the new bank resolution framework.
- Regulating and supervising activities in the digital asset space.
- Effective coordination between the Astana International Financial Centre (AIFC) and national regulators is needed to ensure appropriate legal and regulatory frameworks for digital financial assets.
- Strengthen the institutional capacity of the financial regulator (ARDFM), including additional resources as needed.
Structural reforms
- Accelerate reforms to lift productivity and reduce the state footprint to facilitate private sector activity and higher sustainable growth.
- Recommended areas of reform and investment:
- Further investments in health, education, digitalization, and infrastructure.
- Boost private sector development through:
- Reinforcing legal protections and ensuring property rights.
- Reducing barriers to entry and the cost of doing business.
- Strengthening public sector governance and continuing privatization efforts to improve efficiency and transparency of public sector entities.
International Monetary Fund.