Economy picks up speed in the fourth quarter

GDP growth accelerates above trend: According to a preliminary estimate, the Kazakh economy stepped on the gas in the fourth quarter, as annual GDP growth accelerated to 4.8% in January–December (January–September: +4.1% yoy). Still, the reading means that economic growth over 2024 as a whole slowed from 2023’s 5.1%, though it outpaced the pre-pandemic 10-year average of 4.5%.

Primary sector and construction spearhead upturn: From a production point of view, the upturn was spearheaded by a 13.7% increase in the agriculture, forestry and fishing sector (January–September: +10.8% yoy) and a 13.1% rise in construction activity (January–September: +10.1% yoy). In addition, the services sector grew at a faster clip of 4.7% in January–December compared to the 4.0% expansion noted in the nine months to September, thanks to improvements in domestic trade and transportation. Less positively, growth in the industrial sector decelerated to 2.8% from January–September’s 3.1%: Mining and quarrying swung into contraction, and energy supply lost steam, outweighing stronger readings for manufacturing and water supply. A breakdown by expenditure is not yet available, but sturdy real wage growth—which outpaced inflation—likely boosted private consumption. On the external front, merchandise exports swung into contraction, while goods imports growth accelerated, dragging on the headline result.

Economy to keep a healthy head of steam in 2025: Our panelists expect the Q4’s acceleration in momentum to have carried over into 2025, likely outpacing its pre-pandemic average through the end of 2025. As a result, our Consensus is for overall growth in 2025 to rise from 2024 and clock the joint-strongest reading in 12 years: Laxer financing conditions, lower inflation, planned fiscal stimulus and capital investments should bolster domestic demand, and higher oil output and stronger EU demand should buttress exports. International sanctions are a key downside risk.

Panelist insight: Analysts at the EIU commented: “Economic growth will be supported by strong activity in the services and construction sectors in 2025. Although the government revised its oil production forecast for 2025 downwards by 1% on January 8th, this remains 9.5% higher than the end-year forecast of 87.8m tonnes (about 1.9m barrels per day) for 2024 that the government cited in December. It is now targeting oil output of 96.2m tonnes in 2025, which puts it broadly on target to meet its goal of increasing annual oil production to 100m tonnes by 2030.”

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