The World Bank has published its latest Kazakhstan Economic Update, projecting that Kazakhstan’s economy will remain resilient but slow from 6.5 percent growth in 2025 to 4.6 percent in 2026 and around 3.5 percent by 2028. The report attributes the moderation to normalization in oil output after a one-off boost from the Tengiz field and to the limits of demand-led growth without deeper structural change. Its special topic argues that gaps in foundational skills, including literacy, numeracy and basic problem-solving, are holding back productivity, innovation and the creation of better-paid, higher-quality jobs, making human capital development a central issue for diversification. While unemployment is low at 4.6 percent, the report warns that inflation remains a key challenge. After reaching 12.3 percent year on year in December 2025, inflation is expected to stay above the central bank’s 5 percent target through at least 2027, with upside risks from continued fiscal stimulus and the planned removal of fuel and utility tariff freezes. Monetary policy transmission is described as constrained by inflation expectations and rapid credit growth. Higher oil prices are expected to support revenues, narrow the fiscal deficit and strengthen the external position in 2026, but the outlook remains exposed to geopolitical tensions, volatile energy markets, rising household debt and the risk that further quasi-fiscal expansion could intensify cost-of-living pressures.

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