ASTANA – Kazakhstan’s government has approved the Forecast of Socio-Economic Development and draft national budget for 2027-2029, targeting annual economic growth of more than 5% through 2029 while reducing the budget deficit to 0.4% of GDP. Financial analyst Rassul Rysmambetov says the targets are achievable, but only if Kazakhstan expands its productive capacity through greater electricity generation, industrial development and deeper processing.
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Under the baseline scenario, real GDP growth is projected to average more than 5% annually, while the national budget deficit is expected to decline from 2.3% of GDP in 2027 to 0.4% in 2029. Inflation is projected at 7.5-9.5% in 2027, before moderating to 6-8% in 2028-2029.
Kazakhstan’s economy grew by 4.1% in January-July, while the government expects full-year GDP growth of at least 5%. The framework focuses on expanding non-oil sectors, improving public spending efficiency and maintaining macroeconomic stability.
Non-oil sectors to drive growth
The government expects manufacturing, agriculture, construction and services to provide the main contribution to growth.
Nominal GDP is projected to increase from 199.3 trillion tenge (US$436.2 billion) in 2027 to 245 trillion tenge (US$536.3 billion) in 2029. Manufacturing is expected to outpace mining, led by metallurgy, machinery, construction materials, chemicals and food production.
Agriculture is forecast to grow by at least 5% annually, while construction growth is projected to rise from 16% in 2027 to 17.3% in 2029. Transport and warehousing and information and communications are expected to grow by 10.4% and 9.2%, respectively.
Inflation remains an important assumption
The projected inflation path is an important part of the macroeconomic framework. Inflation is expected to remain relatively high in 2027 before declining in the following two years.
Its trajectory will affect household purchasing power, business costs, investment decisions and the government’s fiscal position. Keeping inflation on the projected path will also affect the sustainability of planned economic growth.
Reducing the deficit while maintaining investment
The government projects budget revenues of 19.9 trillion tenge (US$43.5 billion) in 2027, rising to 23.4 trillion tenge (US$51.2 billion) in 2029. Expenditures are planned at 30.2 trillion tenge (US$66.1 billion) in 2027, 29.4 trillion tenge (US$64.3 billion) in 2028 and 29.6 trillion tenge (US$64.8 billion) in 2029.
The non-oil deficit is expected to decline from 5.3% of GDP to 2.5% over the same period.
At the same time, the 2027 budget allocates 10.5 trillion tenge (US$23 billion) to the social sector and 3.8 trillion tenge (US$8.3 billion) to the real economy. Targeted transfers from the National Fund will provide 2 trillion tenge (US$4.3 billion) in 2027 and 1.5 trillion tenge (US$3.2 billion) annually in 2028-2029 for critical infrastructure and nationwide projects.
Can Kazakhstan deliver growth while tightening its budget?
The government’s targets raise a broader question: can Kazakhstan sustain annual GDP growth of more than 5% while reducing the budget deficit to 0.4% of GDP by 2029?
According to financial analyst Rassul Rysmambetov, the target is realistic, but achieving it will require increasing the economy’s productive capacity.
“In general, it is realistic. I would say a range of 4.5-5.5% is achievable. By then, we need to increase our economy’s potential by around 1.5%, meaning our productive capacity. This would require somewhat greater electricity generation, more factories and better processing. These are the key factors: productive capacity.
Right now, for example, you could build all the roads in Kazakhstan and increase GDP by 15%, but that would cost $20 billion, and this is not sustainable. GDP should grow healthily in line with the economy’s potential, not at any cost, but gradually. So, overall, 5% growth in 2029 is quite realistic,” he told The Astana Times.
Rysmambetov’s assessment points to productive capacity as a key condition for sustaining growth. Additional electricity generation, industrial capacity and deeper processing could allow the economy to expand without relying excessively on higher government spending.
This makes the composition of investment as important as its volume. Infrastructure spending can support growth by removing constraints on businesses and improving connectivity, but its longer-term effect will depend on whether investment creates new productive capacity and supports private-sector activity.
Indicators to watch
The government expects goods exports to rise from $82.8 billion in 2027 to $88.5 billion in 2029, while the National Fund’s foreign-currency assets are projected to increase from $65.2 billion to $70.6 billion.
Progress will depend on whether economic growth, inflation, budget revenues and productivity develop in line with the forecast while infrastructure and social investment are maintained.
Non-oil sector growth, private investment, export performance, inflation, tax revenues and the pace of deficit reduction will provide key indicators of how closely actual outcomes follow the 2027-2029 framework.
