Kazakhstan Investment

Economic growth slows in the first quarter of 2026

GDP growth slows sharply in Q1: Kazakhstan's GDP increased 3.0% in Q1 year on year, following 6.5% growth in 2025 as a whole. Q1's reading was the joint-lowest since H1 2021.

Industry contracts for the first time since 2020, and other sectors decelerate: Compared with 2025 on average, readings in January–March worsened for the agricultural sector (+3.4% year on year vs +5.8% in 2025), the industrial sector (-0.1% yoy vs +7.5 in 2025), the construction sector (+14.8% yoy vs +15.9% in 2025) and the services sector (+3.6% yoy vs +5.2% in 2025). A sharp slowdown in services, the biggest contributor to GDP with a share of nearly 60%, was attributed to domestic trade growing at a pace nearly half that seen in 2025. This reflects a 4% VAT hike, record-high policy rates and double-digit inflation. Meanwhile, industry—the second-largest sector—contracted for the first time since 2020 as mining output fell at a double-digit rate due to a temporary halt in production at Tengiz—the country’s biggest oilfield—and disruptions at the CPC Black Sea terminal, which handles 80% of Kazakh oil.

GDP growth to gain pace in Q2: In Q2, annual GDP growth should recover somewhat: Output at Tengiz returned to normal levels in late March, and exports through the CPC marine terminal were reportedly stable in April. That said, a shutdown of the Kashagan offshore oilfield planned for 1 June will cap the mining output recovery. In 2026 overall, GDP growth should hit a four-year low—a sharp slowdown from 2025’s 14-year high. This reflects a cooling of the overheated economy; private consumption growth should nearly halve from 2025, while public spending and fixed investment are also seen decelerating, amid tight monetary and fiscal policy. In contrast, export growth should accelerate, aided by elevated petroleum output and expanding non-oil commodity exports amid higher global prices.

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