Kazakh Prime Minister Highlights Robust Economic Growth in 2023

Last Updated on December 29, 2023 12:48 pm

ASTANA – Prime Minister Alikhan Smailov shared positive developments in Kazakhstan’s economy over the year in an interview with the 24KZ TV channel, the Prime Minister’s press service reported on Dec. 28.

Economic outlook

Despite global challenges, the country’s economy has shown a steady growth, reaching 4.9% over the first 11 months, with an expected year-end growth close to 5%, Smailov said.

He spoke about positive trends in all major sectors, including a 13% growth in construction sector, 11% in trade, and 8% in the communications sector.

Investment’s primary role

“Economic growth is primarily driven by investment, its volume in fixed capital increased by 15% to 15 trillion tenge ($33 billion),” the Prime Minister noted.

He emphasized Kazakhstan’s leading position in gross inflow of foreign direct investment (FDI) among Central Asian countries. Last year, FDI grew 18% and reached $28 billion, a record-high figure for the country in a decade.

According to Smailov, $13.3 billion was attracted into Kazakhstan’s economy in the first half of the year. Nearly $27 billion is expected by the end of 2023.

Elaborating on President Kassym-Jomart Tokayev’s initiative to double the national economy to $450 billion by 2029, the Prime Minister revealed plans to attract at least $25 billion of FDI every year. He mentioned future implementation of a nationwide pool of about 1,000 investment projects worth over 32 trillion tenge ($70.2 billion).

“All this will ensure economic growth at a level of 6% in the medium term,” he said.

Inflation forecast

Addressing inflation, Smailov stated that the expected year-end inflation rate would be 9.8%, representing a twofold reduction. Plans for the next year include targeting an inflation rate of 6-8%.

Projects implementation

The Prime Minister also highlighted the commitment of the private investor to allocate at least $3 billion over the next three-four years, including $1.3 billion in the coming year to the Qarmet Karagandy Metallurgical Plant.

As stated by Smailov, completion of several major projects in the country enabled to address water supply concerns, enhance energy supply reliability, reduce traffic congestion, and resolve the issue of stable gas supply.

Transportation potential

The Prime Minister discussed the significant increase in transit traffic, with 13 international corridors, and the construction of new railway lines, including the Bakhty-Ayagoz line to enhance capacity between Kazakhstan and China.

“The total volume of transit traffic this year increased by 21% to 30 million tons,” he noted.

Smailov emphasized the ambitious railway construction plans, exceeding 1,300 kilometers in the next 3-4 years, compared to 2,500 kilometers in the past 30 years. Maritime transport development includes building a container hub in Aktau by 2025 and launching a grain terminal in the Kuryk port, with ongoing construction of the Sarzha multifunctional terminal.

Addressing road freight, the Prime Minister outlined plans to construct and reconstruct 11,000 kilometers of roads, including 7,000 kilometers within the national network.

Shift from raw material extraction to higher value-added industries

Over the past five years, the manufacturing industry has equaled the mining sector in volume and continues to grow, marking a substantial change in the industrial structure.

A budget allocation of over 600 billion tenge ($1.3 billion), including preferential lending, is earmarked to facilitate the implementation of new projects. Approximately 300 non-resource sector projects, valued at 1.6 trillion tenge ($3.5 billion), are expected to be commissioned by year-end, with 170 projects worth around 800 billion tenge ($1.7 billion) specifically in the manufacturing industry.

“Next year, we plan to introduce over 400 projects with a total value of 4.6 trillion tenge ($10 billion). Thus, the process of diversification is accelerating, and we are systematically moving away from the raw material focus of the economy,” Smailov stressed.