The "Center for Applied Economic Research (AERC)" has published its latest macroeconomic review of Kazakhstan, which includes an analysis of trends and forecasts for 2025.
It is anticipated that the real GDP of Kazakhstan will grow by 4.6% (y/y) in 2025, surpassing the previous forecast of 4.0%. The improvement in the forecast is attributed to a significant increase in fiscal stimulus from the government, along with better expectations for consumer and investment demand.
"It is important to note that this forecast is based on the assumption that Kazakhstan's oil production remains at 89 million tons. If the Tengiz expansion project begins at the end of Q1 2025, along with the resolution of sanction risks for Kazakhstan's extraction sector, this would provide grounds for revising the forecast upwards," the review states.
AERC expects that the state budget deficit for the current year will reach 3.37 trillion tenge or (-)2.3% of GDP. In October, the deficit was estimated at 5.82 trillion tenge or (-)4.2% of GDP. The revision of the budget deficit forecast is primarily linked to an increase in expected transfers from the National Fund.
AERC has downgraded its forecast for consumer inflation in the country, expecting it to average around 7.0% (y/y), compared to the October forecast of 6.7%. At the same time, AERC acknowledges the possibility of further upward revisions to the inflation forecast if inflationary factors intensify.
"The issue of under-collection of tax revenues remains on the agenda in 2025, therefore significant withdrawals from the National Fund will continue. Thanks to the Fund’s resources, the state budget deficit in 2025 is expected to be (-)2.3% of GDP (previously anticipated at (-)4.2% of GDP). A significant increase in imports is projected for 2025, which, combined with an expanding deficit in the services trade, will lead to a deterioration in the negative current account balance to (-)8% of GDP (previously forecasted at (-)5.2% of GDP)," wrote AERC General Director Zhanybek Aigazin in the review's summary.
He also noted that current realities are characterized by a transition to a new technological paradigm, which can be described in scientific terms as a "bifurcation point."
"The future is causing anxiety among people like never before, leading to hopes for leaders who can either be creators or destroyers. The question of whether the new president of the United States will be a catalyst for global progress or a source of instability remains open. At the same time, significant expectations are tied to the potential end of the war in Ukraine. The global agenda in 2025 will undoubtedly be shaped by the actions of the new U.S. president's administration. Historical parallels and contexts mentioned in the section 'Details: The Truman and Trump Shows - Cycles of History' illustrate that the arrival of Donald Trump could significantly impact the world order. The term 'Maganomics,' reflecting a combination of Trump’s economic and political approaches, will define mid-term global trends," writes Zhanybek Aigazin.
In his opinion, with Donald Trump coming to power, one can speak of an increasing influence of the technological oligarchy represented by Silicon Valley companies. This, on one hand, will promote the adoption of artificial intelligence and technological progress, while on the other hand, it may exacerbate social inequality. He also notes that the contradictory nature of Trump's rhetoric could destabilize an already unbalanced global financial and economic system.
In the January issue of the World Economic Outlook, the IMF upgraded its forecast for global growth in 2025 from 3.2% to 3.3%, but this growth will be uneven: with better prospects for the U.S., but declining economic activity in some developed countries. A decrease in overall global inflation is anticipated, but developed economies are expected to return to target levels sooner than emerging markets and developing countries. The IMF points to a significant dependence of emerging global risks on U.S. economic decisions, as well as a suspension of the shift in monetary policy, which will have implications for budget stability and financial stability.