Kazakhstan has a developing economy that is considered upper-middle income. It is the largest in Central Asia in both absolute and per capita terms. As of 2023, the nation has attracted more than US$370 billion of foreign investments since becoming an independent republic after the dissolution of the former Soviet Union. It possesses oil reserves as well as minerals and metals. Almost every known element on the periodic table can be found in Kazakhstan. It also has considerable agricultural potential, with its vast steppe lands accommodating both livestock and grain production. The mountains in the south are important for apples and walnuts; both species grow wild there. Kazakhstan's industrial sector rests on the extraction and processing of these natural resources.
The dissolution of the Soviet Union and the collapse of demand for Kazakhstan's traditional heavy industry products have resulted in a sharp decline of the economy since 1991, with the steepest annual decline occurring in 1994. In 1995–97 the pace of the government program of economic reform and privatization quickened, resulting in a substantial shifting of assets into the private sector. Kazakhstan was granted "market economy country" status by the European Union and the United States, in 2000 and 2002 respectively.Vakulchuk, R. 2014. Kazakhstan's Emerging Economy: Between State and Market. Frankfurt/Main: Peter Lang. https://www.researchgate.net/publication/299731455
GDP per capita shrank by 26% in the 1990s. Kazakhstan's economy turned downward in 1998 with a 2.5% decline in GDP growth due to slumping oil prices and the August financial crisis in Russia. In the 2000s, Kazakhstan's economy grew sharply, aided by increased prices on world markets for Kazakhstan's leading exports: oil, metals and grain. GDP grew 9.6% in 2000, up from 1.7% in 1999. In 2006, extremely high GDP growth had been sustained, and grew by 10.6%. The increased economic growth also led to a turn-around in government finances, with the budget moving from a cash deficit of 3.7% of GDP in 1999 to 0.1% surplus in 2000. The country experienced a slowdown in economic growth from 2014, sparked by falling oil prices and the effects of the Russo-Ukrainian War.Kazakhs battle to stave off chill blowing in from Russian steppe , Financial Times, 21 May 2014
History
Macro-economic trend
In the 2014 Economic Freedom Index published by The Heritage Foundation in Washington, D.C., Kazakhstan has gained 22 points over the past 17 years, which is noted by the authors as among the 20 best improvements recorded by any country. Kazakhstan's economic freedom score is 69.1, equalling "moderately free". Its overall score has increased by 0.1 point, with significant improvements in investment freedom and government integrity offsetting steep declines in fiscal health and monetary freedom. Kazakhstan is ranked 11th among 43 countries in the Asia–Pacific region, and its overall score is above the regional and world averages.
According to the World Bank’s latest Kazakhstan economic update – Economic Recovery During Challenging Times (spring, 2023), the economy is set to experience a moderate growth acceleration, with real GDP forecast to rise by 3.5 percent in 2023 and 4 percent in 2024 supported largely by the hydrocarbons sector as oil production increases. In the 2023 Economic Freedom Index published by The Heritage Foundation in Washington, D.C., Kazakhstan ranks 71st out of 176 countries, falling in the group of "moderately free" countries. Kazakhstan's economic freedom score is 62.1. Kazakhstan ranks 13th out of 39 countries in the Asia–Pacific region, and its overall score is above the world and regional averages.
This chart shows trends in the gross domestic product of Kazakhstan at market prices estimated by the International Monetary Fund, with figures in millions of tenge. Year Gross domestic product (millions ₸) US$ exchange rate Inflationindex (2000=100) Per capita income (as % of USA) 1995 78,014,200 T 61.11 64 3.81 2000 102,599,902 T 142.26 100 3.53 2005 147,453,000 T 132.88 140 9.012017159,406,930₸344.18
The following table shows the main economic indicators in 1980–2023. Inflation under 5% is in green. YearGDP(in bn. US$ PPP)GDP per capita(in US$ PPP)GDP (in bn. US$ nominal)GDP growth(real)Inflation rate(in Percent)Unemployment (in Percent)Government debt(in % of GDP)1992120.27,0522.9n/an/an/an/a1993111.86,6135.2−9.2%1,662.3%n/an/a199499.86,31511.9−12.6%1,402.0%10.1%n/a199593.55,96616.6−8.2%176.3%11.0%n/a199695.76,18321.00.5%39.1%13.0%n/a199799.06,51922.21.7%17.4%13.0%n/a199898.26,56822.1−1.9%7.3%13.1%n/a1999102.36,86516.92.7%8.4%13.5%n/a2000114.97,72718.39.8%13.3%12.8%n/a2001133.38,97722.213.5%8.4%10.4%n/a2002148.79,99924.69.8%5.9%9.3%17.6%2003165.711,08230.89.3%6.5%8.8%15.0%2004186.512,37043.29.6%6.9%8.4%11.4%2005211.013,86257.19.7%7.5%8.1%8.1%2006240.815,63781.010.7%8.6%7.8%6.7%2007269.317,293104.98.9%10.8%7.3%5.9%2008283.517,737133.43.3%17.1%6.6%6.8%2009288.717,819115.31.2%7.3%6.6%10.2%2010313.519,071148.07.3%7.1%5.8%10.7%2011344.020,634192.67.5%8.3%5.4%10.1%2012369.921,878208.05.0%5.1%5.3%12.1%2013417.524,326236.65.9%5.8%5.2%12.6%2014427.524,545221.44.3%6.7%5.0%14.5%2015407.423,057184.41.0%6.7%5.0%21.9%2016423.823,654137.30.9%14.6%4.9%19.6%2017448.524,699166.83.9%7.4%4.9%19.9%2018478.125,989179.34.1%6.0%4.8%20.2%2019508.627,295181.74.5%5.2%4.8%19.9%2020501.826,582171.1−2.6%6.8%4.9%26.4%2021545.827,987197.14.1%8.0%4.9%25.1%2022603.330,523225.53.3%15.0%4.9%23.5%2023654.132,712259.34.6%15.0%4.8%23.4%2024783.639,379291.45.0%8.7%4.8%24.4%2025923.445,310306.26.5%11.4%4.8%25.2%
Economic growth and GDP According to the World Bank, Kazakhstan's economy grew by 5.1% in H1 2023, driven by exports and fiscal stimulus. GDP is projected to grow by 4.5% in 2023 and subsequent years, aided by new oil production coming on-stream.
Kazakhstan's economy recorded an average real GDP growth rate of 3.0% in the decade to 2022, above the 2.5% average for Eastern Europe. In 2022, real GDP growth was 3.3%. The official estimate for Kazakhstan's GDP was $512 billion at the end of 2022 in purchasing power parity terms.
The country devalued its currency by 19% in February 2014."Tenge Fever", The Economist, 22 February 2014 The country experienced a slowdown in economic growth from 2014 sparked by falling oil prices and the effects of the 2014 Russo-Ukrainian War.
The Government of Kazakhstan signed a Framework Partnership Agreement with IBRD, IFC, MIGA on 1 May 2014; according to this Agreement the World Bank will allocate US$2.5 billion to Kazakhstan, for the diversification of the economy and reaching the sustainable development.
The World Bank report shows that Kazakhstan, as of 2015, reached the level of an upper-middle-income country with a GDP of US$170 billion.
Another 22% devaluation occurred in August 2015.Kazakhstan's currency plunges , The New York Times, 21 August 2015
Foreign direct investment increased 30 percent in 2015 in Kazakhstan's agricultural industry and 80 percent in the country's petroleum products sector.
In 2016 Kazakhstan's economy started to recover from the crisis caused by low oil prices and the tenge devaluation. According to the Minister of National Economy of Kazakhstan, in nine months of 2016 the GDP growth reached 0.4%. Sectors of economy that experienced the highest growth included construction (6.9%), agriculture (4.9%), and transport sector (4.0%).
The GDP per capita in current US$ in Kazakhstan declined by about 40% between 2013 and 2017.
Kazakhstan was ranked 25th out of 190 countries in the World Bank's Doing Business 2020 report. The country improved its position by 3 points, from 28 to 25, in the 2020 ranking compared to the previous year. This placed Kazakhstan ahead of countries such as Iceland (26th place), Austria (27th place), Russia (28th place), Japan (29th place), etc.
Kazakhstan has prioritized the development of non-oil sectors of economy, which accounted for 85% of the country's economic growth in 2019.
The biggest growth in 2020 occurred in the automotive industry (+53.6%), pharmaceuticals (+39.7%), processed metal products (+19.5%), mechanical engineering (+16.5%), as well as in light industry (+16.4%). The industries in the service sector that demonstrated growth included construction (+10.7%) and information and communications (+8.2%).
The World Bank reported that Kazakhstan's economy recorded a gross domestic product (GDP) growth of 3.2% in 2022. This was a part of the trend where the economy was projected to grow by 3.9% in 2023, driven mainly by the hydrocarbons sector and increased oil production.
Sectors of economy
Primary
Agriculture
Energy
Kazakhstan is the leading country in the world for uranium production volumes with 35% of global production, and it has the world's second biggest uranium reserves after Australia.
Oil and gas
Oil and gas is the leading economic sector. In 2000, Kazakhstan produced 35,252,000 metric tons of oil (700,000 barrels per day), a 17.4% increase over 1999's 30,025,000 tons. It exported 28,883,000 tons of oil in 2000, up 38.8% from 20,813,000 tons in 1999. Production in 2001 has been growing at roughly 20%, on target to meet the government's forecast of 40,100,000 tons of oil (800,000 barrels per day). In 2000, production reached 11.5 km3 of natural gas, up from 8.2 km3 in 1999.
Kazakhstan has the potential to be a world-class oil exporter in the medium term. The landmark foreign investment in Kazakhstan is the TengizChevroil joint venture, owned 50% by ChevronTexaco, 25% by ExxonMobil, 20% by KazMunaiGas of Kazakhstan, and 5% by LukArco of Russia. The Karachaganak natural gas and gas condensate field is being developed by BG, Agip, ChevronTexaco, and Lukoil. The Agip-led Offshore Kazakhstan Consortium has discovered potentially huge Kashagan oil field in the northern Caspian. Kazakhstan's economic future is linked to oil and gas development. GDP growth will depend on the price of oil, as well as the ability to develop new deposits.
January 2022 began with thousands of people returning to the streets of Kazakhstan to protest against the surging gas prices, recording four straight days of demonstrations, which is claimed to be the biggest protests to have taken place in the oil-rich country in decades. Protesters invaded into government buildings and took over police vehicles despite a strict emergency led by the state being in place.
Mining
Kazakhstan is a leading producer of many mineral commodities, including salt, uranium, ferrochrome, titanium sponge, cadmium, potash, magnesium, rhenium, copper, bauxite, gallium and zinc.
The country was the world's largest producer of uranium in 2022. In 2019, the country was the world's 10th largest producer of gold; 11th largest world producer of copper; 3rd largest worldwide producer of chromium; 9th largest world producer of bauxite; 9th largest world producer of zinc; 10th largest worldwide producer of antimony; 12th largest world producer of iron ore; 12th largest world producer of lead; 14th largest world producer of manganese; 17th largest world producer of phosphate; 6th largest world producer of bismuth, and the 7th largest world producer of sulfur.
Raw materials