Kazakhstan's economy to slow down in 2024, then accelerate in 2025 - ADB
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The Asian Development Bank (ADB) has marginally revised downwards its economic growth outlook for Kazakhstan in 2024, following weaker expansion in services in the first half of the year coupled with lower oil outputs, massive floods, and a slowdown in investment, ADB reports.
The Asian Development Outlook (ADO) September 2024, the latest edition of ADB’s flagship publication, projects 3.6% growth of Kazakhstan’s gross domestic product (GDP) this year, slightly lower than the bank’s previous forecast of 3.8% in April 2024. The Central Asian nation’s economic growth is expected to accelerate to 5.1% in 2025.
In the first half of 2024, tax revenue collection declined as receipts from oil duty and value added tax were lower compared to the same period in 2023. The decline in tax collection was offset by higher transfers from the sovereign wealth fund, the National Fund of the Republic of Kazakhstan (NFRK), with the government utilizing three-quarters of planned annual transfers in the period. This partially led to the national currency appreciating as the central bank converted the NFRK foreign currency receipts to tenge to meet the government transfer requests.
While the economic growth prospects for Kazakhstan’s look positive in the medium term, its fiscal challenges need to be addressed to ensure sustainable and inclusive economic growth," said ADB Country Director for Kazakhstan Utsav Kumar.
Average inflation slowed to 8.9% in the first 7 months of 2024 down from 17.2% last year. Inflation is projected to slow further to 6.1% in 2025, reflecting tight monetary policy and a stable exchange rate enabled by substantial foreign reserves and commodity export earnings. The combined reserves in the NFRK and the central bank surpassed $100 billion as of June 2024.
Kazakhstan joined ADB in 1994. ADB has since committed about $7 billion in loans to the government and private sector, grants, and technical assistance.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members-49 from the region.
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Olzhas Bektenov discusses further economic development with experts
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Prime Minister Olzhas Bektenov met with representatives of the expert community in the field of economy and entrepreneurship, primeminister.kz reports.
The main purpose of the meeting was to discuss measures and approaches of the economic block of the Government to achieve sustainable economic growth. Deputy Prime Minister - Minister of National Economy Serik Zhumangarin reported on the current economic situation in the country and voiced approaches to fiscal reform to address the development of industry, modernisation of infrastructure, launch of new growth points in the regions.
The participants of the meeting discussed the drafts of the new Tax and Budget Codes, which enshrine measures to stabilise public finances and their effective use.
In the course of the meeting on the impact of the proposed changes on various sectors of the economy were expressed by the chairman of the Presidium of the National Chamber of Commerce and Industry ‘Atameken’ Raimbek Batalov, chairman of the board of the Union of Machine Builders of Kazakhstan Meiram Prshembayev, executive director of the Republican Association of Mining and Mining and Metallurgical Enterprises Nikolay Radostovets, president of the Association of Real Estate Developers of Kazakhstan Viktor Mikryukov, chairman of the Committee of Pharmaceutical, Medical Industry and Medical Services of the Presidium of the National Chamber of Commerce and Industry Atameken Nurzha Nurzha, chairman of the Board of Directors of the National Chamber of Commerce and Industry Atameken.
Expert opinions were shared by the Chairman of the Board of Directors of the Eurasian National University named after Gumilyov Zhaksybek Kulekeev, Chairman of the Board of Directors of NAC Analytica Corporate Fund Rasul Rysmambetov, Managing Partner of Dasco Consulting group LLP Darmen Sadvakasov, General Director of Fortune Partners LLP, Head of Tax Law School MNU Dana Tokmurzina, Chairman of the Public Council on Public Finance MF Rustam Zhursunov, Head of the analytical group Comment, economist Eldar Shamsutdinov. Director of the Centre for Applied Research Talap Rahim Oshakbaev, head of DESHT analytical centre Kuanysh Zhaikov, economist Galymzhan Aitkazin, independent financial analyst Andrey Chebotarev, managing partner of investment company Visor Kazakhstan Almas Chukin and others also attended the discussion.
Prime Minister thanked the participants of the meeting for a constructive dialogue and instructed the Ministries of National Economy, Finance to work out the voiced proposals on reforming the fiscal sphere.
The President has set a task is to change the structure of the economy with strengthening the development of the real sector. Therefore, the discussed reforms are important for the country. Fiscal reform will be an effective mechanism to improve the work on further development of the economy," Olzhas Bektenov emphasised.
The Government continues to actively work with experts to develop the most effective measures to stimulate economic growth.
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2025 World Economic Forum kicks off in Davos
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This year, the Davos Economic Forum convenes under the theme "Collaboration for the Intelligent Age," a Kazinform correspondent reports.
Spanning from January 20 through 25, the forum will bring together participants from more than 130 countries, including 60 heads of state and government. Top political leaders include Olaf Scholtz, Federal Chancellor of Germany, Ursula von der Leyen, President of the European Commission, Ding Xuexiang, Vice-Premier of the People's Republic of China, Muhammad Yunus, head of the Interim Government of Bangladesh, presidents of Argentina and SAR - Javier Milei and Matamela Cyril Ramaphosa.
The forum will focus on the prospects for Donald Trump’s second presidential term, the conflict in Gaza, the situation in Ukraine and climate change.
According to Deutsche Welle, Donald Trump’s return to the White House will be a key topic of discussion in Davos. Threatening to impose customs tariffs on goods both from friendly and unfriendly countries, displaying ambitions towards Canada and Greenland, Trump leaves investors, companies and governments groping for answers.
Politicians and businessmen will try to figure out how the trade wars promised by Trump, will begin, and how they will impact the global economy.
It is expected that the announced tariffs will hit such countries as Germany and China, which are already struggling recession or unsatisfactory economic growth.
In turn, on the first day of the forum, climate activists sprayed green paint over Amazon's base in Davos, protesting against the company’s environmental policy.
Earlier, it was reported that more than 80 countries gathered in Riyadh, Saudi Arabia, for Future Minerals Forum.
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National Bank of Kazakhstan limits currency exchange rate differences
The National Bank has announced the development of a draft resolution titled "On setting limits for the deviation of the buying rate from the selling rate of foreign currency in tenge for transactions conducted through exchange offices", reports a Kazinform News Agency correspondent.
According to the draft, it is proposed to establish limits for the deviation of the buying rate from the selling rate of cash foreign currency for transactions conducted through exchange offices.
The limits are set as follows:
- For the US dollar: 7 tenge
- For the Euro: 10 tenge
The proposed changes aim primarily to reduce speculative actions in the foreign exchange market and to cover the risks of financial market participants.
These restrictions will not apply to exchange transactions conducted in non-cash form.
The full text of the draft resolution can be found on the official website of the National Bank of Kazakhstan.
Earlier, it was reported that JSC "Baiterek" National Management Holding announced the successful completion of the next phase in the digital tenge pilot project for the agro-industrial complex, including its conversion and deposit into a second-tier bank account.
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E-commerce market volume in Kazakhstan reaches 3.2 trillion tenge
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At the Government session under the chairmanship of Prime Minister Olzhas Bektenov the issue of e-commerce development was considered. Minister of Trade and Integration Arman Shakkaliyev made a report. Hear representatives of the industry: Chairman of the Board of Kazpost Assel Zhanasova, Chairman of Halyk Bank Umut Shayakhmetova, Chairman of the Board of the Association of Digital Kazakhstan Denis Stepantsev, primeminister.kz reports.
In 2024, the volume of the e-commerce market in Kazakhstan totalled 3.2 trillion tenge, and its share of total retail trade reached 14.5%.
The importance of e-commerce as a driver of economic growth was noted. The industry has allowed to create more than 300 thousand jobs, and labour productivity growth was more than 30% in relation to traditional shop and market sales.
Taking into account the development of the e-commerce market, the head of the Government Olzhas Bektenov emphasised the need to reduce risks both for consumers in acquiring low-quality goods and for producers who face unfair competition.
A significant share of our market is occupied by foreign online marketplaces. We can use them effectively to increase exports of domestic goods. On the other hand, there are issues with the protection of consumer rights, intellectual property and personal data of our citizens. The level of quality of goods on marketplaces also raises questions. Not only foreign marketplaces, but also domestic marketplaces do not guarantee quality. Information about the authenticity of goods is often missing," Olzhas Bektenov said. In this regard, the Ministry of Trade and Integration has been given a number of instructions.
The Prime Minister has set a task to develop measures for digitalisation of all trade activities in Kazakhstan, including markets and local small shops.
Together with the Ministries of Justice and Digital Development, Innovation and Aerospace Industry, it is necessary to develop specific measures to improve the level of consumer protection in e-commerce. Olzhas Bektenov instructed to make appropriate proposals by the end of February.
At the same time instructed to develop additional measures of state support for the development of e-commerce together with interested government agencies and the Digital Kazakhstan Association. Taking into account the previously adopted Plan for the development of electronic commerce until 2027, the proposals of the domestic business community and the experience of working with marketplaces, it is necessary to update the provisions of the document by the end of March this year.
The task to form effective supply chains of goods both within the country and at the international level in conjunction with interested government agencies and the business community by the end of March has been set.
Head of the Government also instructed to increase the existing capacity of Kazpost. The ministries of digital development, innovation and aerospace industry, trade are tasked with the development plan of the national postal operator.
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Tax receipts from tourism double in Almaty
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In three quarters of last year, 1.7 million tourists travelled to Almaty, a 14.2% increase year-on-year, Kazinform News Agency correspondent reports.
In 11 months, Almaty’s tourism sector generated 85.5 billion tenge, double the figure of last year, said the local authorities.
Investment in fixed capital of the city totaled 92.9 billion tenge, rising by 12% compared to a year before. Last year, the city saw 35 new accommodation facilities, including 20 hostels, four glamping sites, eight hostels and three guest houses, open, adding an additional 836 rooms.
In a bid to become Central Asia’s top tourist destination, the city is to attract more investors, promote tourist infrastructure and enhance its global position in 2025, added the city authorities.
According Almaty mayor Yerbolat Dossayev, 1.7 million tourists, including 507,000 foreign guests, visited the city in 9 months of 2024.
Earlier it was reported that Uzbekistan and Iran would establish a joint tourism committee.
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Inflation in Kazakhstan: Slowdown in average annual growth and price increases
The Bureau of National Statistics' latest data report showed annual inflation in 2024 amounted to 8.6%, slowing down from 9.8% in 2023. However, significant price increases were recorded in a number of segments of the economy, Kazinform News Agency correspondent reports.
Prices for paid services increased by 13.3%, and by 8.3% for non-food products, in addition to 5.5% for food products. Among services, the most noticeable price increases were observed for cold water (+43.1%), cellular communications (+27%), rail transport (+24.9%) and heating (+22.3%).
The electronics segment also saw an increases: laptops rose in price by 67.3%, wireless headphones by 55.2%, USB flash drives by 54.9%, and tablets by 45.7%.
In the food category, significant price increases were recorded for potatoes (+37.7%), sweet peppers (+25.5%), and olive oil (+23%). At the same time, some products saw a decrease in pricing: buckwheat prices fell by 21.4%, carrots became cheaper by 8.7%, sugar by 3.2%, rice by 2.9%, and cabbage by 1.7%.
As for regional differences, the highest inflation was recorded in Astana, where the annual rate was 10.7%, which is 2.1% higher than the national average. In second and third place are Karaganda region (9.6%) and North Kazakhstan region (9.3%). The lowest rates of price growth were observed in Almaty region (6.6%), Zhambyl (7.0%) and Pavlodar (7.4%) regions.
The consumer price index in December 2024 compared to November was 0.9%. During this period, prices for food products increased by 1.1%, for non-food products and paid services - by 0.8%. In annual terms, the growth in prices for food products was 5.5%, for non-food products - 8.3%, and for paid services - 13.3%.
Read more detailed inflation forecasts in Kazakhstan for 2025 in the analytics of the Kazinform News Agency correspondent.
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