Kazakhstan is working to reduce its dependence on natural resources and embrace industrial diversification, while investing into infrastructure in the transport and energy sectors, said Evgeny Vinokurov, chief economist at the Eurasian Development Bank (EDB), in an interview with bne IntelliNews. 

According to Vinokurov, rapid and sustainable growth is the key objective. "Kazakhstan – as well as other Central Asian economies – wants to grow not only sustainably but also outright rapidly. Rapid growth is needed to achieve higher living standards and to get a better place in the international division of labour. Industrialisation is key here," he said.

The EDB has a relatively optimistic projection for Kazakhstan’s economic growth this year, forecasting that it will expand by 5.5% in 2025, up from 4.8% in 2024. 

Vinokurov pointed to changes in growth drivers, with the impetus for growth shifting from exports towards internal sources. “In 2025, key drivers of Kazakhstan’s economic growth will include government initiatives to develop vital infrastructure, implement socially significant projects and stimulate regional growth,” he said. 

“Our forecast indicates the potential for economic growth, driven by the start of a new investment cycle. This new phase is set to expand the non-resource sector, with manufacturing leading the way.” 

As pointed out by the EDB, by the end of 2024, 180 investment projects with a total value of KZT1.3 trillion ($2.6bn) had been carried out in the manufacturing sector, pushing growth in the sector close to 6%, to its highest rate in a decade.

Robust exports 

This is not to discount hydrocarbons. In 2025, oil output and exports are projected to increase with the introduction of new capacity at the Tengiz field, contributing an estimated 0.4-0.6 percentage points (pp) to GDP growth. Additionally, a reduction in the base interest rate is expected to further stimulate economic expansion.

Kazakhstan's total foreign trade turnover is estimated to be around $140bn in 2024. While the country’s exports are still largely resource-based, the share of fuel and energy goods in trade has declined from 76.4% in 2014 to 57% in 2024. This shift, driven by rising exports of chemical products, metals, and metal-related goods, reflects a gradual move away from oil dependence and highlights the ongoing need for economic diversification.

On the import side, Russia and China remain Kazakhstan’s top trade partners, accounting for 30% and 26% of imports respectively. In addition, imports from other countries have seen some growth, including France (3.3%), South Korea (3.1%), Turkey (2.9%) and Vietnam (1.15%).

However, Vinokurov cautioned against depending on external demand, warning that between 2025 and 2027, global economic growth is expected to slow to an average of around 3% annually.

“[F]or Kazakhstan, the main challenge would be slower growth of export demand. Hence, Kazakhstan will simply have to rely more on internal sources of growth,” said Vinokurov. 

Industrialisation drive

A central part of Kazakhstan’s economic strategy has been attracting investment into its manufacturing sector. 

Kazakhstan's economic strategy prioritises diversification, with a strong focus on industrial development. Over the past four years, the industrial sector’s share of GDP has grown by an average of 1.7 pp compared to the 2015-19 period. Meanwhile, the contribution of mechanical engineering enterprises to industrial output growth doubled on average between 2017 and 2024 compared to 2011-14.

An EDB study identifies Kazakhstan as the leading destination for mutual investments in the Eurasian region. In terms of foreign direct investment (FDI) from outside the region, Kazakhstan has a significant investment stock from China, though its growth has been relatively modest. Meanwhile, FDI from Gulf countries, particularly the UAE and Qatar, has quadrupled, reaching $3.1bn, reflecting the Gulf states' increasing presence in Central Asia.

As demand grows, Kazakhstan is positioning itself as a leader in critical raw materials, particularly uranium and rare earth elements (REEs). 

"The country accounts for 40% of global uranium output, supplying China, the EU and the US, with Kazatomprom playing a dominant role in the international market. Moreover, Kazakhstan boasts vast reserves of REEs, tungsten, copper, lithium and cobalt, all essential for high-tech industries and the green transition," Vinokurov said. All of these are critical for high-tech industries and the green transition. 

A major lithium deposit discovered in 2024, valued at $15.7bn, reinforces Kazakhstan’s role in the global battery and renewable energy industries. With 2.2mn tonnes of tungsten, it also ranks among the world’s largest holders of this strategic metal. The country is expanding REE mining, focusing on elements vital for electric vehicle (EV) motors, wind turbines and electronics.

Mitigating the landlocked 'penalty'

As a landlocked country, Kazakhstan faces inherent logistical challenges. However, strategic investments in transport infrastructure are giving it a more prominent role in global trade. 

"Kazakhstan is a key player in the transport and logistics market of Central Asia and Eurasian region – three out of five major Eurasian transport corridors pass through its territory," said Vinokurov.

The EDB has long supported investments into transport connectivity in Eurasia, which are crucial given that five of its six member states, including Kazakhstan, are landlocked. 

“Landlocked economies grow slower on average than comparable economies with good access to the ocean. There is a ‘penalty’ of sorts for being landlocked. The policy challenge is at least to mitigate this situation. And, at best, turn it around, making such regions a transport crossroads,” said Vinokurov. 

“Historically, our region has developed east-west links. Now it is supplementing them with corridors and routes in the north-south direction. This is an opportunity for Central Asia to reduce the 'penalty' and then become a transport crossroads for Eurasia.” 

Cargo traffic along the Middle Corridor, for example, grew by 62% year on year to 4.5mn tonnes in 2024, while the volume of container traffic increased 2.6 times. The number of container block trains from China to the Caucasus and Turkey rose 30 times to an all-time high of 358. 

Looking for nuclear for energy security

Another issue is energy security, especially given Kazakhstan’s growing population and the expansion of the industrial sector. To address this, investments into renewables are ongoing, and the government is also considering setting up the country’s first nuclear power plant (NPP). 

"Electricity demand is rising fast. By 2031, it is expected to grow by about 30%," Vinokurov said. Without additional capacity, the country could face an energy shortage of up to 7 TWh and a capacity deficit of 4.8 GW.

"A large nuclear power plant would help bridge this gap, ensuring a stable energy supply,” Vinokurov commented. 

At present, Kazakhstan produces much of its electricity from coal, and transitioning to nuclear power offers a cleaner, more reliable alternative. As Vinokurov argues, achieving carbon neutrality by 2060 will not be possible without nuclear energy as a low-carbon power source.

“Beyond just meeting demand, nuclear power is also key to strengthening energy security. Kazakhstan still relies heavily on coal. Nuclear energy offers a clean and stable alternative, and I am very serious about that. Nuclear energy is a green alternative to coal. Kazakhstan will not be able to reach carbon neutrality by 2060 without nuclear. Globally, nuclear power is recognised as a low-carbon energy source, so building an NPP would be a major step toward a greener future,” said Vinokurov. 

Kazakhstan is also developing a broader nuclear industry, leveraging its position as the world’s largest uranium producer. Plans include investments in fuel production, advanced reactor technologies and workforce training, which will not only strengthen energy independence but also contribute to economic diversification. This initiative is expected to drive innovation, create high-value jobs and position Kazakhstan as a key player in the global nuclear sector.

However, ensuring energy security requires a multi-pronged approach. Modernising coal plants and converting them to gas could reduce emissions by 30% while significantly improving air quality in major cities. Expanding renewable energy sources – such as solar, wind and bioenergy – is equally important, alongside developing hydropower projects to balance the grid.

Kazakhstan has already made progress in its renewable energy transition. "As of 2024, renewable energy facilities, including solar, wind, biomass and small hydropower plants [HPPs], accounted for 6.4% of the country’s electricity generation, a jump from almost zero in 2015," according to Vinokurov. 

The government aims for renewables to account for 15% of electricity generation by 2030. The EDB supports this shift, with over $640mn invested in green projects.

At the same time, Kazakhstan has made significant efforts to digitalise its economy, with the recent approval of the National AI Development Strategy being a key milestone. Digital transformation is reshaping industries such as agriculture, energy, and public administration by boosting efficiency, reducing costs and enhancing service quality, according to Vinokurov. 

This shift is also driving investment growth. Over the past decade, net FDI in the IT sector has risen sevenfold, reaching a record $129.2mn in 2024, according to the National Bank of Kazakhstan. Additionally, Kazakhstan’s tech industry is expanding its global footprint, with IT service exports reaching $546.7mn in 2023. The country has set an ambitious target of $1.8mn in IT exports by 2029. 

“These efforts are key to Kazakhstan’s long-term economic growth,” said Vinokurov. “Let me repeat, simply exporting commodities is not enough for Kazakhstan. Expanding digital and high-tech industries helps reduce reliance on hydrocarbon resources, a crucial step given the volatility of global oil prices. For Kazakhstan, digital transformation is not just another fad. It is a strategic necessity.”