Experts Say Kazakhstan’s Economy is Growing, But Few Can Feel It

Kazakhstan’s economy expanded by 3% year-on-year in the first quarter of 2026, according to a Halyk Finance report released April 27, marking a slowdown from 5.6% growth in the same period last year. Analyst Timur Dilmukhametov attributed the decline to a sharp drop in oil and gas production, which weakened related industries, while the short-term economic indicator index fell to 2.5% from 8.3% annually. Industrial output shrank by 0.7% year-on-year, driven by a near 20% decline in oil production, though manufacturing rose 8.5% due to strong machinery (+21.9%) and food manufacturing (+12.6%) growth. Transport remained the top performer with 12.8% growth, though down from 21% in early 2025, while construction slowed to 14.8% from 16.9%. Financial analyst Rasul Rysmambetov described the economy as a ‘flat phase,’ noting growth lacks investment momentum and is propped up by government spending and large projects. Small businesses face regulatory hurdles, and liberalization efforts have not extended beyond tariffs, he said. Real household incomes declined, pushing retail trade growth to 2.8% from 6.3% in Q1 2025, as inflation outpaced wage increases. The gap between economic growth and purchasing power has become structural, with citizens reporting shrinking disposable income, particularly for essential goods.