If the Cabinet monitors its investments, economic growth could become even more effective
By the end of the year, Kazakhstan’s 5.1% economic growth was primarily driven by the development of the non-oil sector. A Kazinform News Agency correspondent sought expert opinions on how these results were achieved and whether Kazakhstan can sustain this momentum into 2025.
Collage credit: Kazinform.
Senior partner at CSI and economist Olzhas KHUDAIBERGENOV believes that the current economic growth trend can continue into 2025.
“In fact, Kazakhstan has the potential for double-digit growth with the right approach to both domestic and foreign investors. Currently, there is significant interest in investing in Kazakhstan from China, the Middle East, Europe, the U.S., and Russia. By eliminating bureaucracy, these investments could not only double the current growth rates but also stimulate even greater investment inflow,” the expert notes.
In his view, the growth of the non-oil sector was accompanied by increased production in the manufacturing industry and industrial construction. Additionally, the transport and communication sectors grew thanks to the active expansion of freight traffic through Kazakhstan. These industries showed an increase in physical volumes this year of 6-8%.
Financial analyst at R-Finance Arman BAIGANOV emphasizes the development trend in the agricultural segment and the light industry sector.
“It is logical that growth occurred in the manufacturing industry, as this year oil and other raw material prices decreased. Leaders included agriculture, construction, and trade, as we became a transit country for deliveries to Russia. I believe that non-oil sector growth will continue next year since raw material prices are unlikely to rise. Moreover, our government is actively allocating funds to the agro-industrial complex and the food industry [Ed. Note – processing]," commented Arman Baiganov.
He added that if the Cabinet monitors its investments, economic growth could become even more effective.
Economist Timur AYSAUTOV notes that the government has adopted a policy to protect domestic producers from external competition, enabling Kazakhstan to achieve 6-7% economic growth.
“Preliminary results for this year show GDP growth at 4.4%. By year-end, this figure may reach 5%. This is a good indicator, especially in the post-COVID period when the economy was slowing down. However, it is insufficient given Kazakhstan’s economic potential because our structure is predominantly resource-based, and we have immense growth potential. We have a low starting point, enormous resources, a small population, highly qualified personnel, and, most importantly, natural resources,” the economist notes.
He is confident that the current economic growth rates will persist in 2025 provided there are no global crises or trade wars among major economic centers. Additionally, logistical chains, which are critical for Kazakhstan, must remain intact.
“For now, the situation is predictable and stable. I think Kazakhstan will maintain a growth dynamic of 4-5% in the coming years, but doubling GDP by 2029 is unlikely,” said Timur Aysautov.
The expert compares this with China’s economic growth, which averaged 10% annually over 20-30 years. In his opinion, accelerating Kazakhstan’s economic growth requires a change in the country’s economic paradigm.
“To achieve more dynamic development, it is necessary to increase VAT to protect domestic manufacturers from external imports and strengthen policies to combat capital flight,” the speaker believes.
Earlier, it was reported that on December 17, the Prime Minister of Kazakhstan informed the Head of State about the country’s economic growth achieved through the development of the non-oil sector. According to the government, GDP growth for January–November of this year amounted to 4.4%. Incremental growth was achieved in agriculture (13.4%), construction (10.3%), trade (8.2%), transport (8.1%), manufacturing (5.3%), including metallurgy (7.2%) and mechanical engineering (6.9%), chemical industry (8.4%), as well as information and communication (5.3%). Additionally, capital investments for the first 11 months of 2024 increased by 3.1%, with the highest growth also noted in non-oil industries.
Photo credit: Freepik.com.
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