Top 5 Investment Trends in Kazakhstan
1. Slower Growth in Fixed Capital Investments.
The growth rate of fixed capital investments is declining compared to the last two years. Despite government efforts to attract investments, growth for the first 11 months of 2024 reached only 103.1%. This is significantly lower than in 2022 (109.2%) and 2023 (111.2%). These rates fail to meet the targets set in the National Development Plan. However, in economic theory, investment flows are traditionally cyclical with phases of growth and slowdown. The current slowdown is linked to the completion of major projects and reflects a natural stage in the investment cycle.
2. Foreign Investment Share Reaches Historical Low.
Since 2010 the share of foreign investments in fixed capital has dropped from 40% to 19% in 2023 and further to 16% in 2024. This decline is due not only to reduced foreign investment in Kazakhstan but also to increased activity by domestic investors and public funds.
3. Diversification of Investment Flows.
Investments in mining have declined while non-resource sectors are gaining momentum. Investment growth in mining was 76.7% with its share in the overall structure falling to 20% (from the previous 30-40%). This is due to the completion of the Tengiz field expansion. At the same time, investments in the non-resource sector grew by 108.1%, signaling economic diversification and fostering optimism.
4. Budget Investments Support Economic Growth.
Growth in fixed capital investments reached 103.1% in the first 11 months of 2024. However, excluding state funding, this figure drops to 96.9%. The share of budget funds in fixed capital investments reached 20.2%, the highest level in the past decade.
5. Small Business Leads Investment Activity.
Previously large oil and metallurgical companies accounted for more than 50% of fixed capital investments. Over the past four years the share of large businesses has fallen to 33%, the lowest in a decade. Meanwhile, small businesses have shown record growth, increasing their share of national investments to 58% in 2024.
Investment trends indicate gradual changes in Kazakhstan’s economy. The declining share of foreign capital and growing reliance on public funds point to challenges in attracting private investors, particularly in the context of regional geopolitical tensions. However, the activity of small businesses and the growth of the non-resource sector provide a solid foundation for diversification. The key priority now is to focus on creating a stable and predictable environment to strengthen the confidence of both domestic and remaining foreign investors.
Yernar Serik – Expert in Trade and Investment Policy,
Author of the Telegram Channel tradereport.kz (link: https://t.me/tradkz)
