Kazakhstan's Growth Edges Up to 4.5% on Construction

Kazakhstan's economy grew 4.5% year on year in January to October 2026, according to figures from the Ministry of National Economy reported on 10 November, a step up from the 4.2% recorded for the first nine months but well below the 6.4% pace of the same period in 2025.

The acceleration is modest and rests on construction, manufacturing and services rather than oil, which keeps pulling the headline number down. For the National Bank, which cut its base rate in October, the data arrive just as inflation is easing but still close to 9%.

The numbers behind the headline

Output outside the resource sector grew an estimated 5.6% over the ten months, The Times of Central Asia reported. Manufacturing rose 9.3% (8.6% in the first nine months), led by pharmaceuticals at 50.9%, machinery at 22.2% and food at 13%. Construction grew 13.1%, transportation and warehousing 7.5%, trade 6.2%, agriculture 5.2% and communications 4.9%. Overall industrial output rose only 3.5%, because oil production fell 8.3% in January to September.

The government's own nine-month review, published by the Prime Minister's office on 13 October, showed the same pattern: construction, manufacturing, transport, trade and agriculture together accounted for about 80.5% of growth. It also reported a current account surplus of $2.4 billion in the first half, against a $3.6 billion deficit a year earlier.

Fixed investment rose 7% in January to September, with private investment up 18.2%, according to the Times of Central Asia report.

What it means

The mix matters more than the total. Kazakhstan is growing in spite of its largest export sector, and the fastest gains are in activities tied to domestic demand and investment. Transportation and warehousing growth of 7.5% is consistent with heavier freight handling, although the sources do not break it down by route, so any link to Middle Corridor volumes through the Caucasus should be treated as unconfirmed until rail and port data are published.

Household incomes remain the weak spot. Real income per person rose only 0.1% in the first quarter and 0.7% in the second, the Times of Central Asia noted, which sits awkwardly beside double-digit construction growth and suggests that investment, not wages, is doing the heavy lifting.

Inflation is moving the right way. Annual inflation was 9.2% in October, down from 9.3% in September. The National Bank, in a statement published on 2 November, said its Monetary Policy Committee cut the base rate by 50 basis points to 15.75% on 23 October and that "Disinflationary processes are strengthening." It added that annual inflation may rise in the coming months because of a low base from the 2025 utility tariff moratorium, and that it would respond to second-round effects of regulated price changes but not their direct effects. The chance of a rate change before the end of 2026 remains low, it said.

What to watch

The first indicator is whether oil output stabilises, since the 8.3% fall is the main drag on a headline figure that the National Bank forecasts at 4.5% to 5.5% for 2026. The second is the November inflation print, where the tariff base effect could reverse some of the recent progress. The third is the 2027 inflation range of 6.5% to 8.5% that the central bank set in its September forecast round, which implies a long road back to its 5% target in 2028.

Sources: The Times of Central Asia, 10 November 2026; Prime Minister of Kazakhstan, 13 October 2026; National Bank of Kazakhstan statement, via BIS, 2 November 2026; National Bank of Kazakhstan, 4 September 2026.

Image: Caucasus Business Journal archive, via caucasusbusinessjournal.com