IMF forecasts Kazakhstan’s economic growth to reach 5.6% in 2025
According to the latest report from the International Monetary Fund, the global economy will remain strong, growing at 3.2% in 2024 and 2025, the same pace as in 2023, while Kazakhstan's GDP growth could reach 3.1% in 2024 and 5.6% in 2025, reports Kazinform News Agency correspondent.
World and regional forecasts
Despite the gloomy forecasts, the world avoided a recession, the banking system proved resilient, and the largest emerging market countries were not victims of the sudden change in capital inflows. Global inflation is falling at almost as fast a rate as it is.
“The global economy continues to display remarkable resilience with growth holding steady and inflation declining, but many challenges still lie ahead. Global growth was 3.2 percent in 2023 and is expected to remain at that level both in 2024 and 2025. This represents a 0.3 percentage point upgrade from our October objections for 2024, with stronger activity than expected in the U.S., China, and other large emerging markets, but weaker activity in the Euro Area,” said Pierre‑Olivier Gourinchas, director of the IMF Research Department at an April 16 press briefing.
For the Middle East and Central Asia regions, growth is forecast to increase to 2.8% in 2024 (up from 2% in 2023) and 4.2% in 2025.
However, it should be noted that uncertainty and risks are becoming more prevalent amid ongoing controversies, shipping disruptions and declining oil production.
While the global economy proved resilient, some downside risks still prevail. One of them is a surge in commodity prices due to regional conflicts.
“We looked at a scenario where we would have more geopolitical tensions that would result in elevated oil prices and energy prices and shipping costs. And what we find is that this would lead to higher price pressures in the global economy that would be higher inflation, there would be lower output,” said Gourinchas.
The experts say the world is “not in that scenario yet.”
“Our assessment of what has happened with the tensions in the Middle East is there has been some increase in oil prices, but it is too early to say whether that would be sustained, and it is not in our baseline, but we certainly looked at the scenario very carefully,” he added.
GDP growth and consumer price inflation (CPI) in Kazakhstan
IMF forecasts a 3.1% increase in real GDP for Kazakhstan this year. At the same time, the IMF believes that Kazakhstan’s GDP growth could accelerate to 5.6% in 2025 due to the expansion of the Tengiz oil field.
Halyk Finance analysts believe that the IMF forecasts are too pessimistic.
“Despite the delay in expanding production capacity at the Tengiz field, the economy this year, in our opinion, will be supported by further stabilization of inflation, favorable oil prices above $80 per barrel, as well as the implementation of planned infrastructure projects,” say analysts of Halyk Finance.
While inflation remained high at 14.6% in 2023, the IMF projects a gradual decline to 8.7% in 2024 and 7% in 2025.
The IMF also considered the importance of the Trans-Caspian International Transport Route for Central Asia, pointing out that the risks of this project include high transport costs and long and unstable transit rates.
Unemployment in Kazakhstan
Compared to neighboring countries in the region, Kazakhstan has consistently maintained a relatively low unemployment rate. In both 2023 and 2024, the unemployment rate remained at 4.8%, and it is anticipated to remain at the same level, 4.8%, in 2025.
IMF notes that much hope is placed on artificial intelligence (AI) to deliver significant productivity gains in the medium term around the world. This is possible, but there is a high probability of serious disruptions in the functioning of the labor and financial markets. To harness the potential of AI for the common good, countries will need to improve their digital infrastructure and invest in human capital.
