In the first quarter of 2026, Kazakhstan's economy entered a cooling phase. Declining oil production, weakening fiscal stimulus, and deteriorating real incomes of the population slowed growth rates, reports Todayinfo citing Halyk Finance.
According to analysts, GDP growth in Q1 amounted to 3% year-on-year, compared to 5.6% in the same period of 2025. A slowdown is observed in all key sectors except agriculture. This is largely due to a significant decline in mining, particularly the oil and gas sector, which has a multiplier effect on related industries. Real incomes of the population showed negative dynamics.
An additional factor was the reduction in fiscal stimulus. The decreased use of National Fund resources at the beginning of the year weakened economic support, although a temporary increase in transfers was observed in March. The government plans to significantly increase quasi-fiscal stimulus in 2026 through a substantial rise in loans from the Baiterek holding to expand preferential lending for businesses and mortgages.
Annual inflation slowed to 11% in Q1, but monthly inflation accelerated in January and February before sharply slowing in March. This was driven by the freeze on regulated tariffs and fuel prices, as well as the strengthening of the tenge. 'The National Bank continues to maintain a tight monetary policy. Given the expected weakening of the tenge and the resumption of tariff increases, we maintain our inflation forecast for end-2026 at 10.5-11.5%,' analysts note.
The tenge strengthened to 478.15 per dollar by the end of Q1, supported by a high base rate, suspension of currency purchases for the UAPF, mandatory sale of foreign currency by quasi-state companies, and portfolio investment inflows. However, analysts expect the tenge to weaken to 540 per dollar by year-end.
