The Eurasian Fund for Stabilization and Development (EFSR) has lowered its forecast for Kazakhstan's gross domestic product growth in 2026 to 5% from 5.2%, while improving its inflation outlook to 9.8% by December from 10.1%, reports infohub.kz.
The updated projections were published in the EFSR's summer regional economic review. The fund noted that most countries in the region experienced a marked slowdown in economic activity in the first quarter of 2026, prompting the revision.
In addition to Kazakhstan, the EFSR downgraded growth forecasts for Russia to 0.6% from 1.2%, Armenia to 5.5% from 5.7%, and Kyrgyzstan to 8.5% from 8.7%. The forecast for Tajikistan was left unchanged at 7.1%, while Belarus saw an upgrade to 1.3% from 0.4%.
The fund also revised its inflation forecasts. For Kazakhstan, expectations improved to 9.8% by December 2026 from the previous 10.1%. However, inflation expectations were raised for Russia, Kyrgyzstan, and Tajikistan, and lowered for Armenia and Belarus.
According to the EFSR, domestic demand remains the main driver of regional economic growth. In Kazakhstan, fixed capital investment rose 6.7% year-on-year in January-April, while retail trade turnover increased 3.4%.
The EFSR also noted that Kazakhstan's fiscal policy remains formally restrained. Monetary conditions have stayed predominantly tight, despite key rate cuts in several regional countries. Kazakhstan's benchmark rate was reduced by one percentage point in 2026 to 17%.
Key risks for Kazakhstan include uncertainty surrounding the end of the moratorium on utility tariffs and fuel prices. On the other hand, factors that could support economic growth include more active economic stimulus and a more favorable external environment, such as commodity prices and demand from trading partners.
Earlier reports indicated that Kazakhstan's GDP grew 4.1% in the first half of 2026.