Washington, DC: The Executive Board of the International Monetary Fund (IMF) completed the Article IV Consultation for Kazakhstan[1].
Kazakhstan’s economy continued to grow at a rapid pace in 2025, boosted by rising oil output and robust activity in non-oil sectors. Strong domestic demand, underpinned by an expansionary public sector stance, has contributed to clear signs of economic overheating. Alongside imported price pressures, this has helped push inflation well above its target. Overall, banks remain resilient amid rapid consumer credit growth. In the medium-term, growth is projected to moderate to around 3½ percent, and inflation would decline only gradually to its 5 percent target by 2030.
The National Bank of Kazakhstan continues to maintain a tight monetary stance amid persistent inflation pressures. Planned fiscal consolidation in the 2026 state-budget will be largely offset by expanding quasi-fiscal activities by State Owned Enterprises, resulting in a continued overall loose public sector stance. Rapid progress in implementing the 2023 FSAP recommendations and ongoing deployment of prudential measures should continue to support financial stability.
Structural reform implementation faces persistent challenges, with the state footprint remaining large and constraining private sector development. Enhancing efforts to diversify the economy and promote private activity in key productivity-enhancing sectors will be crucial to delivering higher levels of sustainable growth.
Executive Board Assessment[2]
Executive Directors commended the Kazakh authorities for the economy’s resilience amid global policy uncertainty and oil price fluctuations. They noted that strong economic growth, however, has been accompanied by persistently high inflation and widening current account deficit, consistent with signs of economic overheating. Directors stressed the importance of ensuring a more restrictive and well‑coordinated macroeconomic policy mix and additional structural reform efforts to deliver more sustainable, inclusive growth.
Directors emphasized the importance of maintaining a tight monetary policy stance until inflation is close to target and noted the need for further policy rate hikes should inflation increase. They also called for more effective liquidity management, including through greater issuance of short‑term notes by the National Bank of Kazakhstan, coordinated with the issuance of treasury bills by the Ministry of Finance. Directors noted such efforts would help strengthen the transmission of monetary policy, enhance government cash management, and support domestic capital market development.
Directors recommended an overall fiscal consolidation to avoid fiscal procyclicality. They emphasized the importance of additional measures to strengthen planned fiscal consolidation, including by phasing out remaining tax exemptions, while stressing that the off‑budget activities of SOEs should be more restrained and carefully calibrated to avoid undermining disinflation efforts. Enhancing the fiscal framework is also a priority.
Directors welcomed that the banking sector remains sound, but noted risks related, in particular, to rapid consumer credit growth. They encouraged continuing to implement key 2023 FSAP recommendations and further strengthen the stability of the banking system. Directors urged giving priority to enacting the new Banking Law, establishing the necessary capacity to operationalize the new bank resolution framework, and regulating and supervising activities in the digital asset space. Ensuring prudential measures are well‑targeted will help mitigate potential financial stability risks from household over‑indebtedness.
Directors urged the authorities to accelerate market and governance structural reforms to further reduce the role of the state and promote private sector activity. They agreed that further investments in health, education, digitalization, and infrastructure should be complemented by reforms to reinforce legal protections, ensure property rights, and reduce the cost of doing business to level the playing field for the private sector. Strengthening the AML/CFT framework is also key.
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Table 1. Kazakhstan: Selected Economic Indicators, 2024–27 |
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Projections |
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2024 |
2025 |
2026 |
2027 |
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Output and prices |
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(Annual percent change) |
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Real GDP |
5.0 |
6.2 |
4.4 |
4.2 |
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Real Oil GDP |
-2.2 |
11.5 |
3.6 |
4.0 |
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Real Non-Oil GDP |
6.9 |
4.9 |
4.6 |
4.2 |
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Headline Inflation (AVG) |
8.7 |
11.4 |
10.7 |
10.0 |
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General government fiscal accounts |
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(Percent of GDP) |
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Revenues and grants |
19.2 |
17.6 |
17.8 |
18.3 |
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Expenditures and net lending |
22.7 |
21.6 |
21.3 |
21.3 |
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Overall fiscal balance |
-3.5 |
-4.0 |
-3.5 |
-3.0 |
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Non-oil fiscal balance |
-8.2 |
-8.3 |
-7.4 |
-7.1 |
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Gross public debt |
24.4 |
25.2 |
27.5 |
28.8 |
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Monetary accounts |
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(Annual percent change) |
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Broad money |
33.4 |
34.3 |
34.8 |
34.9 |
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Credit to the private sector |
25.5 |
26.0 |
26.4 |
26.9 |
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External sector |
(Percent of GDP, unless otherwise indicated) |
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Current account balance |
-2.7 |
-4.1 |
-4.3 |
-4.2 |
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Reserves Assets (USD billion) |
45.8 |
56.1 |
62.6 |
62.8 |
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In months of following year imports of G&S (Units) |
7.0 |
8.2 |
8.9 |
8.8 |
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NFRK assets |
19.9 |
19.4 |
19.2 |
19.5 |
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External debt |
56.5 |
62.7 |
63.9 |
63.8 |
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Sources: Kazakhstani authorities and IMF staff estimates and projections.
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[1] Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.
[2] At the conclusion of the discussion, the Managing Director, as Chair of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities. An explanation of any qualifiers used in summings up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm.
