Eurasian Development Bank keeps Kazakhstan's 2025 GDP growth forecast at 5.5%, raises inflation forecast to 11.9%
ALMATY. June 24 (Interfax) - The Eurasian Development Bank (EDB) is keeping its 2025 GDP growth forecast for Kazakhstan at 5.5% but has raised the inflation forecast to 11.9%, the bank said in a macroeconomic forecast.
"EDB analysts expect Kazakhstan's GDP to grow up to 5.5% in 2025, after rising 4.8% in 2024. The negative effect of external shocks are more than offset by large-scale support measures for investment projects, with planned funding amounting to 6% of GDP. Fiscal policy will work to encourage economic growth, and so will the growth in oil production and state initiatives aimed at regional and infrastructural development," the forecast reads.
In the December edition of its macroeconomic overview, the bank forecasted GDP growth of 5.5% for 2025-2027.
Senior analyst at the EDB's Country Analysis Center Aigul Berdigulova said in an online presentation of the bank's assessment report that the Kazakh government was planning to increase funding for the economy via the Bayterek national holding. "This measure will help to unlock investment potential in processing industries, transport and construction," she said.
"Alongside this, we are operating on the premise that new capacities will be launched at the Tengiz oil field and will raise GDP growth by an additional 0.4-0.6 percentage points in 2025. All of these factors will more than offset the negative effects of the predicted decrease in global oil prices and slowing global economic growth," Berdigulova said.
According to the new macroeconomic forecast, high consumer demand and an increase in housing and utilities tariffs will speed inflation in Kazakhstan up to 11.9% in 2025. In December, the EDB predicted that inflation would reach 7.3% in 2025.
Inflation is expected to peak in the second quarter of 2026. Berdigulova said that it would then begin slowing down towards its target level.
She said that the country would see inflation accelerate due to the depreciation of the tenge in late 2024. "Another factor was the increase in inflation expectations this year due to discussions of tax reforms - more specifically, plans to raise value-added tax (VAT)," Berdigulova said.
The necessity of bringing about a steady deceleration in inflation is one of the principal reasons for maintaining moderately tight monetary conditions. "The forecast is based on the assumption that the National Bank of Kazakhstan will keep the base rate at 16.5% until the end of 2025, and we expect the base rate cycle to begin decreasing at the beginning of 2026 - if inflation starts slowing down stably," the senior analyst said.
EDB analysts forecast that the tenge exchange rate will remain stable throughout 2025, amounting to 515 tenge/$1 at the end of the year and 513 tenge/$1 on average across the year. "Factors sustaining the exchange rate will include the high base rate and the growth in oil exports forecast for the second half, as work begins on a project to expand the Tengiz field," the bank said in its forecast.
Berdigulova said that the bank had forecast the average exchange rate at 536 tenge/$1 in 2026-2027, due to the fall in global oil prices, growth in physical volumes of oil exports, the legal obligation to sell 50% of forex revenue in the quasi-state sector, the conversion of transfers from the National Fund for budget needs and the high base rate.
Kazakhstan's GDP grew 6% in January-April 2025.
Kazakh President Kassym-Jomart Tokayev expects GDP to grow at least 5.5% in 2025, but said that this was "not such an ambitious outcome". Therefore, "the government is seeking out additional sources of economic growth," he said in an interview with Al-Jazeera.
The National Bank of Kazakhstan raised its 2025 GDP growth forecast to 5%-6% at the beginning of the month "due to the increase in internal demand and growth in investment activity".
In April, the International Monetary Fund and the Asian Development Bank lowered their 2025 GDP growth forecasts for Kazakhstan to 4.9%, from 5.5% and 5.1% respectively. The European Bank for Reconstruction and Development (EBRD) also decreased its forecast from 5.2% to 4.9% in May. The World Bank kept its forecast at 4.5% in June.
At the beginning of June, the National Bank of Kazakhstan increased its inflation forecast to 10.5%-12.5% for 2025 and 9.5%-11.5% for 2026, citing the growth in food prices, increased demand-side inflationary pressure and lower oil prices.
Inflation in Kazakhstan slowed from 9.8% to 8.6% in 2024. The National Bank is aiming to stabilize the level around 5% in the medium term.
