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While Kazakhstan's economy is showing signs of growth, a concerning trend of declining real incomes for its citizens persists. The Ministry of National Economy (MNE) has addressed this issue, shedding light on the underlying causes and the government's proposed solutions.

What the Numbers Reveal

Data from the Bureau of Statistics indicates a 1.1% decrease in real incomes for the year 2025. The MNE acknowledges this reality, stating that the current economic growth is not yet translating into widespread improvements in citizens' well-being. This highlights a critical need for better redistribution of economic gains.

Is Business to Blame?

The Ministry has identified businesses as a primary contributor to the decline in real incomes. According to their analysis, the pace of wage growth significantly lags behind the growth in corporate profits. Experts estimate that nearly half of all companies are increasing wages by no more than 10% to save costs, with some keeping them stagnant. This means that even as GDP grows through industry, services, and exports, the benefits are slow to reach the average worker's paycheck.

Officials pointed out that businesses factor in various risks, such as geopolitical instability, sanctions, and fluctuating global prices and exchange rates, into their budgets. These concerns, they argue, hinder companies from allocating more funds towards salary increases.

The MNE noted that wages currently constitute approximately 31% of Kazakhstan's GDP, a figure considerably lower than the over 40% seen in developed economies. The government's objective is to create an environment where incomes are distributed more equitably, encouraging businesses to direct a larger portion of their profits towards employee compensation rather than solely dividends.

Government's Action Plan

To address the decline in real incomes, the Ministry of National Economy has outlined a comprehensive strategy. A joint action plan involving the Government, the National Bank, and the Agency for Regulation and Development of the Financial Market is currently in effect until 2028. This plan aims to reduce inflation to 9-11% by 2026 and further to 5-7% by 2028, with the goal of increasing real incomes by 2-3% annually.

Key measures include a moratorium on utility tariff increases, though this was lifted on April 1st. The Ministry assures that tariff policies will be managed cautiously to minimize financial burdens on citizens. To stabilize prices for socially important food items, producers of 31 essential goods (making up 23.4% of the food basket) will benefit from up to a 70% reduction in electricity and railway transportation tariffs.

Furthermore, the government plans to curb inflation by reducing budget expenditures and transfers from the National Fund. Efforts will also focus on cutting inefficient tax breaks, combating the shadow economy, and strengthening support for vulnerable social groups.

The MNE has announced a broader program, extending to 2029, designed to boost national income. This initiative encompasses creating new jobs, increasing wages, and simplifying the financial system for citizens.

Previously, reports indicated a 3.2% decrease in real wages for Kazakhstanis in the fourth quarter of 2024 compared to the same period in the previous year.

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