Kazakhstan Shows Strong GDP Growth on the Back of Structural Reforms

Kazakhstan is emerging as one of the fastest-growing economies in the post-Soviet space, underpinned by a sustained programme of structural reforms, industrial diversification and rising investment inflows. Preliminary data for 2025 shows GDP growth of 6,5%, placing the country ahead of most CIS peers, including Russia, and well above the projected global average of around 3%.

The expansion reflects broad-based momentum across key sectors. Industrial output rose by 7,4% last year, with manufacturing growing by 6,4%. Particularly strong performance was recorded in food production (up 8,1%), chemicals (9,8%), oil refining (5,9%) and mechanical engineering (12,9%). Transport surged by 20,4%, driven by higher freight volumes and Kazakhstan’s growing role as a transit hub between China and Europe. Construction expanded by 15,9%, supported by large-scale infrastructure and social projects, while trade increased by 8,9%, led by wholesale activity.

The current upswing crowns a decade-long shift in the structure of the economy. Manufacturing’s share of GDP increased from 10,2% in 2014 to 12,4% in 2024, while the mining sector declined from 15,2% to 12%. Over the same period, manufacturing output rose by nearly 50%, averaging annual growth of more than 4%.

The transformation is particularly visible in engineering industries. Car production has quadrupled to 159,000 units in 2025, while output of trucks, tractors and combine harvesters has multiplied several times. Exports of processed goods climbed from $18.4bn in 2014 to $28.8bn in 2024, signalling a gradual move toward higher value-added products.

This process has accelerated in recent years, often described domestically as an “investment cycle” under President Kassym-Jomart Tokayev. In 2025 alone, Kazakhstan launched new facilities producing vehicles for international brands, passenger railcars, auto components, as well as a localization project for John Deere machinery.

At the same time, large companies are investing in rare earth metals and digital development. For example, Eurasian Resources Group's projects will enable Kazakhstan to become the world's second-largest producer of gallium, while AI is being used in manufacturing, energy, logistics, and industrial safety.

Multinationals in consumer goods are following suit. PepsiCo has invested more than $160m in what is set to become Central Asia’s largest snack production facility, integrating local farmers into its supply chain and planning a gradual transition to fully local ingredients. Mars, long present as an importer, is preparing to build a pet food factory with an annual capacity of up to 100,000 tonnes, investing more than KZT 88.8bn (around $180m).

By scale, Kazakhstan remains the region’s undisputed heavyweight. According to the IMF, its GDP reached $319bn in 2025, placing it among the world’s 50 largest economies. Uzbekistan’s economy, by comparison, stands at $159bn, while Azerbaijan’s is around $80bn.

Investment inflows reinforce this position. UN ESCAP data show Kazakhstan attracted nearly $19bn in greenfield projects in 2025, accounting for 89% of all such investment in North and Central Asia. The current investment policy framework for 2024-2029 shifts toward targeted support for priority sectors such as logistics, energy, manufacturing, agriculture and digital services.

A key role in this effort is played by the Government’s Investment Headquarters, which has been operating as a fast-track mechanism for supporting investment projects. By the fall of 2025, the Investment Headquarters had already supported more than 210 projects with a total value of approximately USD 113 billion.

Alongside industrial policy, the government is betting on human capital. Social spending will account for 39% of the 2026 state budget, with major allocations to healthcare, education and welfare. For investors, this combination of macroeconomic growth, diversification and institutional predictability is gradually reshaping Kazakhstan’s image from commodity supplier to regional industrial platform.

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