At the end of a mission to Kazakhstan, an International Monetary Fund staff team said the economy has slowed because of lower oil production after a force majeure accident at the Caspian Pipeline Consortium, but non-oil sectors have helped cushion the impact. The team said real gross domestic product grew 3.7 percent in the first five months of 2026, down from 6.5 percent at end-2025, and projected growth of about 4.6 percent for 2026. It said the policy mix should stay focused on lowering inflation, with monetary policy remaining tight until inflation is firmly on track toward the 5 percent target. The statement said inflation fell to 10.4 percent in May 2026 from 12.9 percent in September 2025, after which the National Bank of Kazakhstan cut its policy rate by 100 basis points in June 2026, but inflation is still expected to remain around 10 percent this year and expectations are only weakly anchored. Planned steps to reduce excess liquidity, including higher reserve requirements and increased issuance of central bank notes, were described as essential, alongside tighter quasi-fiscal activity if needed to avoid overheating. The team also said fiscal and external positions should improve on higher oil prices and tax reforms, with the current account moving from a 4.1 percent of gross domestic product deficit in 2025 to a marginal surplus in 2026, while the banking sector remains sound and tighter prudential measures have helped moderate consumer lending. The IMF staff added that risks are elevated but broadly balanced. It pointed to stronger domestic demand, higher import prices and capital spending as upside risks to inflation, while global uncertainty, tighter financial conditions and possible further disruption to the Caspian Pipeline Consortium pipeline could weigh on growth.
International Monetary Fund2026-06-16
International Monetary Fund staff says Kazakhstan should keep policy tight as growth slows and inflation remains above target
An International Monetary Fund staff team said Kazakhstan’s growth has slowed because of lower oil production, but projected about 4.6 percent growth in 2026 as non-oil sectors and high oil prices provide support. The team said monetary policy should remain tight because inflation is still well above the 5 percent target, despite the National Bank of Kazakhstan’s 100 basis point rate cut in June 2026. It also expects fiscal and external positions to improve and said the banking sector remains sound.