ASTANA — The International Monetary Fund (IMF) has cautioned that Kazakhstan’s strong economic growth is showing clear signs of overheating, calling for tighter and better-coordinated macroeconomic policies, continued monetary restraint, and accelerated structural reforms to ensure sustainable growth.
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The IMF Executive Board completed its Article IV Consultation with Kazakhstan. Under this process, the IMF holds annual bilateral discussions with member countries to review economic developments and policies, reported the IMF on Jan. 27.
Kazakhstan’s economy continued to grow rapidly 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 led to clear signs of economic overheating, pushing 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 3.5%, and inflation would decline only gradually to its 5% target by 2030, according to the report.
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 will be crucial to delivering higher levels of sustainable growth.
Executive Directors commended the authorities for economic resilience but noted that strong growth has been accompanied by persistently high inflation and a widening current account deficit. They stressed the importance of a more restrictive, well-coordinated macroeconomic policy mix and of additional structural reforms.
Directors emphasized maintaining a tight monetary policy stance until inflation is close to the target and called for more effective liquidity management. They recommended overall fiscal consolidation, restraint of off-budget SOE activities, and strengthening the fiscal framework.
While welcoming the fact that the banking sector remains sound, directors noted risks associated with rapid consumer credit growth. They urged continued implementation of the 2023 FSAP recommendations, the enactment of the new Banking Law, and strengthened regulation of digital asset activities.
Directors also urged accelerating market and governance reforms to reduce the role of the state, promote private sector activity, and strengthen legal protections, property rights, and the AML/CFT framework.
