Despite global challenges, Kazakhstan’s economy has shown steady growth, reaching 4.9% over the first 11M 2023, the Astana Times reports. The Prime Minister, Alikhan Smailov, expects the year-end growth to be close to 5%.
Sector-wise growth
Positive trends were observed in all major sectors. The construction sector saw the highest growth at 13%, followed by trade at 11%, and the communications sector at 8%.
Investment-driven economic growth
“Economic growth is primarily driven by investment,” noted the Prime Minister. The volume of investment in fixed capital increased by 15% to 15 trillion tenge ($33bn).
Foreign Direct Investment (FDI)
Kazakhstan holds a leading position in the gross inflow of FDI among Central Asian countries. Last year, FDI grew 18% and reached $28bn, a record-high figure for the country in a decade. According to Smailov, $13.3bn was attracted into Kazakhstan’s economy in the first half of the year. Nearly $27bn is expected by the end of 2023.
Future plans
“All this will ensure economic growth at a level of 6% in the medium term,” he said.
Inflation forecast
Addressing inflation, Smailov stated that the expected year-end inflation rate would be 9.8%, representing a twofold reduction. Plans for the next year include targeting an inflation rate of 6-8%.
Projects implementation
The Prime Minister also highlighted the commitment of the private investor to allocate at least $3bn over the next three years, including $1.3bn in the coming year to the Qarmet Karagandy Metallurgical Plant.
Major projects completion
As stated by Smailov, the completion of several major projects in the country enabled it to address water supply concerns, enhance energy supply reliability, reduce traffic congestion, and resolve the issue of stable gas supply.
Transit traffic and infrastructure development
The Prime Minister discussed the significant increase in transit traffic, with 13 international corridors, and the construction of new railway lines, including the Bakhty-Ayagoz line to enhance capacity between Kazakhstan and China.
“The total volume of transit traffic this year increased by 21% to 30 mn tons,” he noted.
Smailov emphasized the ambitious railway construction plans, exceeding 1,300 kilometres in the next 3-4 years, compared to 2,500 kilometres in the past 30 years. Maritime transport development includes building a container hub in Aktau by 2025 and launching a grain terminal in the Kuryk port, with ongoing construction of the Sarzha multifunctional terminal.
Addressing road freight, the Prime Minister outlined plans to construct and reconstruct 11,000 kilometres of roads, including 7,000 kilometres within the national network.
Manufacturing industry
Over the past five years, the manufacturing industry has equalled the mining sector in volume and continues to grow, marking a substantial change in the industrial structure.
A budget allocation of over 600 bn tenge ($1.3bn), including preferential lending, is earmarked to facilitate the implementation of new projects. Approximately 300 non-resource sector projects, valued at 1.6 trillion tenge ($3.5bn), are expected to be commissioned by year-end, with 170 projects worth around 800 bn tenge ($1.7bn) specifically in the manufacturing industry.
“Next year, we plan to introduce over 400 projects with a total value of 4.6 trillion tenge ($10bn). Thus, the process of diversification is accelerating, and we are systematically moving away from the raw material focus of the economy,” Smailov stressed.
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