Top 5 Economic Risks for Kazakhstan in 2025
1. Decline in reserves of metals and energy resources
Kazakhstan faces a potential reduction in the production of its key export goods. Conservation of certain deposits may begin in 2025 risking social tensions in regions. For example, oil production in 2024 decreased from 95.4 million tons to 90.3 million tons due to delays in expanding the Tengiz field. OPEC+ pressure raises doubts about the project’s completion in 2025. The government may reduce output at other fields in favor of Tengiz, which is economically more viable.
2. Deteriorating infrastructure
Over 65% of Kazakhstan’s power grids are outdated, and most thermal power plants are over 60 years old. One-third of residential buildings are more than 50 years old. Energy production is expected to reach 140.5 billion kWh by 2030, while consumption may grow to 146 billion kWh, creating a deficit of 6 billion kWh. Infrastructure wear will hinder industrial and economic growth in 2025.
3. Budget deficit
In 2024, Kazakhstan’s state budget deficit reached $7.2 billion due to a $6 billion decline in tax revenues. Total budget revenues, including transfers from the National Fund, amounted to only $40.4 billion. The deficit is likely to persist in 2025. Excessive use of National Fund resources jeopardizes plans to restore its assets to $100 billion.
4. Climate change and water scarcity
Kazakhstan is highly vulnerable to climate change, with temperatures rising faster than the global average. Water shortages are expected to affect agriculture, industry, and utilities. By 2028, the country may face chronic water deficits. Melting glaciers already caused $1 billion in flood damage in early 2024.
5. Inflation risks
Inflation in 2025 could exceed the projected 7%. Utility tariffs, fuel prices, and telecommunications costs have been rising since late 2024. These trends are likely to drive up the prices of consumer goods and services.
Top 5 Opportunities for Economic Growth in 2025
1. Processing industries
Recycling of industrial and mineral waste (IMW) remains underutilized. IMW could be used in road construction, particularly in regions like Ulytau and Aktobe with large tailings. Previous efforts faced challenges due to insufficient material studies, leading to road degradation.
2. Agriculture and circular economy
Climate challenges increase global demand for food security. Kazakhstan can focus on producing long-shelf-life goods and developing hydroponic livestock feed. Fertile black soil areas also offer significant potential for sustainable farming.
3. Transport and logistics
Kazakhstan can capitalize on demand for fast cargo delivery between China and Europe. Constructing a narrow-gauge railway from China to the Kurik seaport could attract investments, boost the economy, and create jobs.
4. Small nuclear power plants and waste-to-energy facilities
Kazakhstan voted to develop nuclear energy. Modular small-scale nuclear plants are faster to build and easier to expand. Waste-to-energy plants can address power deficits, improve environmental conditions, and produce construction materials, as seen in developed countries.
5. Construction sector
Population growth supports construction growth in major cities. Urbanization levels in Kazakhstan exceed 75%, creating high demand for urban housing. Regions can localize production of construction materials. For instance, Arkalyk has large clay reserves ideal for construction.
