ASTANA – The Kazakh capital hosted the presentation of the Eurasian Fund for Stabilization and Development’s (EFSD) regional economic report, which outlined mixed economic trends across the region in early 2025, shaped by a combination of domestic and external factors.
EFSD experts project Kazakhstan’s GDP to grow by 5% in 2025, before gradually slowing to 4.5% in 2026 and 4.3% in 2027. Photo credit: The Astana Times
According to EFSD experts, Kazakhstan’s real GDP growth is projected to reach 5% in 2025, followed by a gradual slowdown to 4.5% in 2026 and 4.3% in 2027. In the first quarter of the year, GDP rose by 5.6%, driven by transport, logistics, manufacturing, mining and construction.
Despite the robust growth, Kazakhstan faces mounting inflationary pressure. The National Bank has maintained the base rate at 16.5%, but inflation accelerated to 11.3% in May. The EFSD also anticipates further depreciation of the national currency, projecting the tenge could weaken to 560 per U.S. dollar by 2027 due to continued inflation and possible reductions in withdrawals from the National Fund.
Sergey Ulatov, EFSD chief economist noted noted that economic growth in the region has become more stable and less vulnerable to external shocks, with growth structures adapting to changing external conditions.
The Kyrgyz Republic and Tajikistan experienced the highest year-on-year GDP growth in the first quarter, at 13.1% and 8.2%, respectively, driven by construction, robust domestic demand, and remittance inflows.
In contrast, Russia’s economy is showing signs of cooling, with GDP growth slowing to 1.4% and a decline in industrial production.
“Overall, we see that economic growth in the region has become more stable and less vulnerable to external shocks. The growth structure has adapted to external conditions,” said EFSD chief economist Sergey Ulatov.
Ulatov noted that growth in countries such as the Kyrgyz Republic, Armenia and Tajikistan exceeded expectations. The Kyrgyz Republic has averaged 9% growth over the past three years, while Armenia saw 12% growth in 2023. Tajikistan continues to experience steady growth near 8%.
“Kazakhstan also demonstrates unprecedented stability, especially considering past volatility. Growth across the region has been surprisingly resilient, but long-term challenges remain. Strengthening macroeconomic management will be critical for sustaining growth over the next five years,” he said.
Regarding the recent U.S. duties on Kazakh imports, Ulatov said the impact would be minimal as more than 95% of Kazakhstan’s exports to the U.S. are exempt. Only around 5% of goods are affected.
“The Kazakh government plans to engage with the United States on the remaining items. For affected exporters, there are always opportunities to adapt and redirect trade flows to other markets,” Ulatov said.
Experts also discussed the structure of Kazakhstan’s economic growth, stressing the need for a long-term strategy to achieve sustainable, high-quality growth over the next five to ten years.
“Kazakhstan’s economy remains heavily reliant on extractive industries, particularly the mining sector. To ensure higher-quality growth, the country must shift away from this model by attracting significant investment into the private sector,” said Galymzhan Aitkazin, the fund’s senior economist for Kazakhstan.
He noted that the government is taking steps in this direction, including fiscal reforms and pricing policies designed to stimulate economic activity.
Aitkazin emphasized the critical role of private sector development in driving future economic expansion. However, creating a favorable environment, including liberalizing the economy, will be essential, he said.
“Kazakhstan is on the cusp of becoming a highly accessible economy. But structural imbalances and regulatory challenges continue to hamper full development. Addressing these issues through comprehensive reforms can pave the way for long-term growth and help Kazakhstan transition into a high-income developed economy,” he added.
EFSD, a regional financial institution with more than $9 billion in assets, was founded in 2009 by Armenia, Belarus, Kazakhstan, the Kyrgyz Republic, Russia and Tajikistan. The fund’s mission is to promote economic and financial stability in member states and support their long-term growth.
