Economic growth rises in the third quarter

GDP reading: According to a preliminary estimate, the Kazakh economy pressed down on the gas in the third quarter, as annual GDP growth accelerated to 4.1% in January–September (January–June: +3.2% yoy).

Broad-based improvements fuel growth: From a production point of view, the upturn was spearheaded by an 11.4% increase in the agriculture, forestry and fishing sector (H1: +3.1% yoy) and a 10.1% rise in construction activity (H1: +8.6% yoy). The industrial sector added further momentum, growing 3.0% and improving from H1’s 2.6% increase: A stronger expansion in mining and quarrying outweighed a sharper decline in water supply output plus softer rises in manufacturing and energy supply. In addition, the services sector grew at a faster clip of 4.0% in January–September (H1: +3.4%) thanks to improvements in domestic trade and transportation. A breakdown by expenditure is not yet available, but healthier real wage growth, paired with ongoing monetary policy loosening, likely boosted domestic demand. On the external front, merchandise exports gained momentum, suggesting a stronger outturn in that sector.

Momentum to pick up in 2025: Our panelists expect the economy to be decelerating in the fourth quarter. That said, economic growth will rise steadily thereafter through Q4 2025; as a result, our Consensus is for overall growth in 2025 to outpace 2024’s projection, on the back of stronger household purchasing power and faster increases in exports and government consumption. International sanctions are a key downside risk.

Panelist insight: Analysts at the EIU commented: “Growth is being supported by rising capital investment and hydrocarbons output, as well as stronger activity in the services and construction sectors, amid moderating (if still-elevated) inflation, gradual monetary policy loosening and fiscal stimulus measures. Relatively subdued global demand and geopolitical strains are constraining export performance to some extent, albeit partly offset by ongoing off-balance-sheet re-exporting of sanctioned goods to Russia.”

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