ASTANA, May 13, 2026 - Kazakhstan's economy is expected to remain resilient over the medium term, though growth is set to moderate following a period of strong demand-led expansion, according to the World Bank's latest Kazakhstan Economic Update, Strengthening Skills to Unlock Productivity.
After a robust 6.5 percent expansion in 2025 - driven by strong domestic consumption and a one-off boost in oil production from the Tengiz field - growth is projected to ease to 4.6 percent in 2026 before settling into a more sustainable pace of around 3.5 percent by 2028. The shift reflects a normalization of oil output and, more broadly, the limits of demand-led growth in the absence of deeper structural transformation.
The report's special topic section examines the role of human capital in driving Kazakhstan's long-term economic competitiveness. As the country seeks to diversify its resource-intensive economy, the ability to generate better-paid, higher-quality jobs increasingly depends on the strength of its workforce.
While unemployment remains low at 4.6 percent, persistent deficits in foundational skills - including literacy, numeracy, and basic problem-solving - limit firms' productivity, discouraging innovation, and weakening the economy's resilience to structural change. The report underscores that addressing human capital gaps is a core structural priority, one that is inseparable from Kazakhstan's broader development ambitions, including economic diversification and the creation of sustainable, higher-value job opportunities.
"Kazakhstan's economy has proven resilient, but the path to lasting prosperity runs through productivity, and productivity runs through people," said Andrei Mikhnev, World Bank Country Manager for Kazakhstan and Turkmenistan. "Prioritizing the development of people's foundational skills can help the country generate better-paying jobs and compete in a rapidly changing global economy."
On inflation, the report warns that the challenge is far from over. Having accelerated to 12.3 percent year-on-year in December 2025 - driven by quasi-fiscal expansion and rising import costs - inflation is projected to remain above the central bank's 5 percent target through at least 2027. Upside risks persist from continued fiscal stimulus and the planned lifting of freezes on fuel and utility tariffs, while monetary policy effectiveness remains constrained by inflationary expectations and rapid credit growth.
Higher oil prices are expected to boost revenues, narrow the fiscal deficit, and strengthen the external position in 2026.
Yet the report is clear that the outlook is not without risks. Geopolitical tensions and volatile global energy markets could dampen demand from key trading partners and erode export revenues.
The report cautions that further quasi-fiscal expansion in Kazakhstan risks intensifying cost-of-living pressures amid rising household debt. On the upside, it notes that decisive structural reforms could lift potential growth, attract investment, and support private-sector-led diversification.
The Kazakhstan Economic Update is an annual report that provides an assessment of recent economic developments and the medium-term economic outlook, as well as an in-depth examination of selected policy issues.
