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Kazakhstan's economy is navigating a complex landscape, with an expert highlighting several potential risks that could impact the national currency and overall growth. Economist Marat Abdurakhmanov shared his insights on the stability of the tenge, the effects of the new Tax Code, and other pressing economic concerns.

Tenge Stability Under Scrutiny

Despite initial predictions of devaluation at the end of the year, the tenge has remained relatively stable. This resilience is largely attributed to the National Bank's decision to raise the base interest rate to 18%, tightening monetary policy. However, Abdurakhmanov cautions that this stability might be masking underlying vulnerabilities.

He explains that while the National Bank is increasing the money supply, these funds are not effectively reaching the real economy, instead getting held up in financial instruments. The primary factor supporting the tenge, according to Abdurakhmanov, is not oil prices but rather 'carry-trade' operations. This involves investors borrowing at low interest rates and investing in Kazakhstani government bonds, which offer a high base rate of 18%, generating speculative profits.

This situation mirrors trends seen in 2013, which preceded a significant 19% devaluation of the tenge in February 2014. Abdurakhmanov estimates that while hundreds of millions of dollars enter the country daily, outflows range from $15 to $40 million. Although the current balance is positive, a prolonged period of high interest rates could see dollar outflows exceed inflows, potentially weakening the tenge.

Impact of High Oil Prices and Imports

Contrary to popular belief, Abdurakhmanov argues that high oil prices are not entirely beneficial for Kazakhstan. Rising global oil prices directly contribute to increased domestic fuel costs. Because Kazakhstan artificially keeps prices low, it facilitates the 'grey export' of fuel to neighboring countries.

With current production rates, Kazakhstan's oil reserves are estimated to last only 20-30 years. Reducing production could extend this to 100 years. The economist advocates for a sound tax policy, protection of the domestic market, and the development of raw material processing to create jobs, boost the budget, and address social issues.

Processing and Currency Strength

A stronger tenge typically disadvantages exporters, such as the grain sector, which has seen a slowdown. However, Abdurakhmanov points out that this scenario makes domestic flour production and its export more profitable. A stronger tenge also lowers the cost of imported equipment, increasing profit margins for the processing industry. He believes this should be the model Kazakhstan pursues, emphasizing a comprehensive exchange rate policy rather than focusing on isolated sectors.

New Tax Code and Business Impact

The new Tax Code, implemented in late 2025, was projected to reduce the income of small and micro-businesses by over 2 trillion tenge. While the full impact on small businesses is expected in May-June and for micro-businesses in August, a decline in revenues for the Unified Pension Fund and the Social Health Insurance Fund has already been observed.

Emigration and Banking Sector Concerns

An increasing number of Kazakhstani citizens are seeking employment abroad. Official data indicates that 156,000 citizens left to look for work in the first nine months of 2025, a figure that continues to rise annually.

There are projections that bank profitability could turn negative by the end of 2026. This could make it harder for ordinary citizens to obtain loans, as banks may reduce lending and tighten requirements. Furthermore, fuel prices are expected to increase by 5-15% starting May 1st. Combined with rising utility tariffs, this will lead to higher prices for all goods and services, while household incomes are expected to remain at 2024 levels, potentially causing financial hardship for many families.

Addressing Financial Sector Issues

If banks require state assistance, Abdurakhmanov suggests solutions beyond budget allocations. He proposes banning offshore operations and reinstating laws on transfer pricing to bring billions of dollars held abroad back into the country.

Future Scenarios for Kazakhstan

The economist outlines three potential scenarios for Kazakhstan's economic future: a cascade of failures, a period of stagnation, or a comprehensive reform. He stresses that implementing the second scenario, which involves government action on the President's directives, revising the Tax Code, and addressing interest rates, is crucial. Without these measures, the country faces either a downward spiral or the necessity of significant reform.