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ASTANA – The Eurasian Fund for Stabilization and Development (EFSD) has raised its forecast for Kazakhstan’s economic growth in 2027 to 5%, up from 4.6% in its previous outlook, while projecting a gradual decline in inflation through 2029.
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The fund expects Kazakhstan’s gross domestic product (GDP) to grow by 5% in 2026, following 6.5% growth in 2025. Growth is projected to remain at 5% in 2027 before slowing to 4.2% in 2028 and 4.1% in 2029, according to the EFSD’s autumn regional economic outlook.
The revised forecast reflects expectations of sustained oil production, major investment and infrastructure projects, and a more expansionary fiscal policy. However, the fund warns that strong domestic demand and continued budget stimulus could complicate efforts to bring inflation under control.
“The main challenge for economic policy will be to strike a balance between supporting economic growth and maintaining price, fiscal and external stability,” said Sergei Ulatov, the EFSD’s chief economist.
Oil production and investment to support growth
The EFSD expects Kazakhstan’s economy to maintain relatively strong growth despite less favorable global conditions, including geopolitical tensions, higher transportation costs and volatility in commodity markets.
The fund forecasts 5% GDP growth in 2026, unchanged from its summer outlook. The estimate reflects the recovery of oil production at the Tengiz field to full capacity in the second quarter, steady performance in non-oil sectors and high investment activity by the quasi-public sector.
Additional support is expected from fiscal policy in the second half of the year, including a planned targeted transfer of 1.5 trillion tenge (US$3 billion) through the Infrastructure Development Fund.
Elevated commodity prices amid global uncertainty are also expected to support export revenues and activity in resource-producing companies. The outlook for 2027 has improved, with the EFSD raising its growth forecast from 4.6% to 5%. The revision is based on expectations that oil production will remain stable, large-scale investment and infrastructure projects will proceed, and fiscal policy will provide stronger support.
However, the fund expects consumer demand to remain relatively subdued because of moderately tight monetary conditions, slower retail lending and weak growth in real household incomes. In 2028-2029, growth is expected to moderate as the effects of increased oil production fade and domestic demand returns to more sustainable levels.
Inflation to decline gradually through 2029
The EFSD expects inflation to reach 9.5% by the end of 2026, down from its previous forecast of 9.8%. The revision reflects slower price growth amid weaker increases in regulated services and fuel and lubricants prices, as well as a stronger tenge.
Inflation is projected to decline further to 8.8% in 2027, 7.8% in 2028 and 6.8% in 2029. However, the fund expects inflation to remain above the National Bank of Kazakhstan’s 5% target throughout the forecast period. Persistent domestic demand, elevated inflation expectations and potential increases in utility tariffs and fuel prices remain key risks.
The National Bank is expected to continue cautiously easing monetary policy. The average base rate is projected to decline from 16.9% in 2026 to 14.8% in 2027, 12.8% in 2028 and 10.8% in 2029.
The outlook suggests that monetary policy will remain relatively tight even as inflation gradually slows, reflecting the challenge of containing price pressures without undermining economic activity.
Current account deficit expected to narrow
The EFSD expects Kazakhstan’s external position to improve in 2026, supported by favorable terms of trade and commodity export revenues.
The current account deficit is projected to narrow to 1% of GDP in 2026, compared with 4.1% in 2025. The fund attributes the improvement to stronger external trade conditions, although the effects of higher commodity prices vary across countries depending on their export and import structures.
The fund noted that trade remains the main channel through which external shocks affect economies across the Eurasian region. Higher energy and transportation costs, alongside slower global demand, continue to pose risks.
In Kazakhstan, oil production disruptions at Tengiz and interruptions to the Caspian Pipeline Consortium (CPC) infrastructure have constrained output and exports. Nevertheless, non-oil industries and investment activity are expected to sustain growth.
The labor market remains stable. Employment reached 9.4 million people in the second quarter, up 0.9% year on year, while unemployment under the International Labour Organization methodology fell to 4.5%, from 4.6% in 2025.
Fiscal policy presents a balancing challenge
The EFSD has revised its assessment of Kazakhstan’s fiscal policy toward a more expansionary stance throughout the forecast period, following the publication of the draft 2027-2029 national budget and the resumption of targeted transfers from the National Fund.
The fund estimates the budget deficit at 2.7% of GDP in 2026, with a further widening expected in 2027 as the government implements a large infrastructure program. The deficit is projected to narrow to 2.5% of GDP in 2028-2029.
The fund expects the global economic environment to remain uncertain at least through the end of 2026, with the Middle East conflict continuing to affect energy markets, transportation costs and inflation in major economies.
Despite these risks, most economies in the Eurasian region are expected to maintain solid growth in 2026, supported by domestic demand, rising incomes, credit expansion and investment. The EFSD noted that the region’s resilience will depend on policymakers’ ability to sustain economic momentum while preserving price stability and fiscal discipline.
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