Economy of Kazakhstan

Kazakhstan
World economic rank	56th (nominal) (2017)
currency	Tenge (KZT)
Conversion rate	100 KZT = 0.28338 EUR
Key figures
Gross domestic product (GDP)	$ 160.8 billion (nominal) (2017) $ 477.6 billion (PPP) (2017)
GDP per capita	$ 8,841 (nominal) (2017) $ 26,252 (PPP) (2017)
GDP by economic sector	Agriculture 5.2% Industry 37.9% Services 56.95%
growth	▲ 3.3% (2017)
inflation rate	7.3% (2017)
Employed	8.48 million (November 2015)
Unemployed	448,900 (November 2015)
Unemployment rate	5.0% (2017)
Foreign trade
export	$ 84.7 billion (2013)
Export goods	Oil and oil products, metals and chemicals
Export partner	Italy 19.5% China 17.0% Netherlands 11.7% Russia 6.9%
import	$ 48.8 billion (2013)
Import goods	Machinery, Metal Products, and Food
Import partner	Russia 36.8% China 17.1% Germany 5.0% Ukraine 4.7%
Foreign trade balance	$ 35.9 billion (2013)
public finances
Public debt	37.5% of GDP (2017)
Government revenue	$ 34.13 billion (2017)
Government spending	$ 37.89 billion (2017)
Budget balance	−2.4% of GDP (2017)

The economy of Kazakhstan is the largest economy in Central Asia in terms of gross domestic product and 47th worldwide and a member of the Eurasian Economic Union . While the economy suffered a severe slump in the years after independence from the Soviet Union , there has been a clear upward trend since the turn of the millennium. The main sources of income include mining and the production of oil and natural gas .

Economic data

gross domestic product

Around half of Kazakhstan's gross domestic product (GDP) is generated in the service sector, which made up 52.6 percent of total GDP in 2013. The second largest sector is industry, the share of which is declining and only contributes 29.6 percent to economic output. The construction industry is responsible for 5.9 percent of the gross domestic product and agriculture for 4.5 percent. The remaining 7.4 percent are generated by other economic services. Kazakhstan's economic output exceeded the US $ 200 billion mark for the first time in 2012 and reached a new high of around US $ 220.3 billion in 2013. GDP per capita has also risen continuously in recent years. While it was $ 8,457 in 2008, it was already $ 12,843 in 2013.

Development of the gross domestic product (nominal)
year	2008	2009	2010	2011	2012	2013
GDP (nominal) [billion $]	133.4	135.3	148.0	188.0	203.5	220.3
Change compared to previous year [%]	▲ 3.3	▲ 1.2	▲ 7.3	▲ 7.5	▲ 5.0	▲ 6.0
Data: Kazakhstan in figures (PDF)

unemployment

Development of the unemployment rate
year	2003	2004	2005	2006	2007	2008	2009	2010	2011	2012	2013
Unemployment rate [%]	8.8	8.4	8.1	7.8	7.3	6.6	6.6	5.8	5.4	5.3	5.2
Data: Kazakhstan in figures (PDF)

Economic policy

Kazakhstan is a member of the Eurasian Economic Union , which was officially founded on January 1, 2015. In 2011 Kazakhstan, Russia and Belarus founded a joint customs union , the predecessor of the Eurasian Economic Union. Kazakhstan is also a member of the Organization for Economic Co-operation and is currently negotiating membership in the World Trade Organization .

In December 2012, Nursultan Nazarbayev presented the “Kazakhstan 2050” strategy, which formulates long-term targets for the country's development. The aim of the strategy is to advance Kazakhstan into the group of the 30 most developed countries in the world. In addition to a low level of new debt and a realignment of the energy supply, the modernization and diversification of the economy is an important goal of the new economic and financial policy in order to reduce the country's dependence on the extraction of raw materials. The expansion of manufacturing, agriculture and transport as well as the restructuring of the energy sector are of particular importance. The focus is particularly on promoting small and medium-sized companies and structurally weak regions.

On October 9, 2014, Kazakhstan and the European Union signed an expanded partnership and cooperation agreement, which is intended to contribute to political, rule of law and economic reforms as well as to the modernization and prosperity of the country. The agreement regulates cooperation in the areas of foreign and security policy, trade and economy, sustainable economic development, legislation and the rule of law, as well as finance, science and technology. It is also intended to expand cooperation in the energy sector with Kazakhstan.

In December 2015, Kazakhstan became the 162nd member of the World Trade Organization (WTO). The accession negotiations lasted almost 20 years and are described as the most difficult of all. The negotiations on customs tariffs with the member states of the Eurasian Economic Union (EAEU) have made a particular contribution. Now, through the concluded agreement, the country's import tariff is to be reduced to 6.1% within 5 years, and to 7.6% for agricultural goods. From the point of view of Kazakh President Nursultan Nazarbayev , membership opens up further opportunities for the growth of the Kazakh economy. According to him, around 90% of trade with WTO countries is already taking place.

At the World Economic Forum in Davos in 2016, the Kazakh Prime Minister Kärim Mässimow increasingly recruited investors. He emphasized the investor-friendly reforms of the economic system and said that the low oil price is an ideal prerequisite for the implementation of such reforms. In addition, Kazakhstan wants to be in an improved starting position at the next World Economic Forum.

Economic sectors

Primary sector - agriculture

Wheat fields near Kokshetau

Agriculture continues to be an important industry, employing almost a fifth of the working population. Almost three quarters of the country's area is suitable for agricultural use. Until the middle of the 18th century, agriculture in what is now Kazakhstan was traditionally rural and nomadic . With increasing Russian influence, Slavs came to Central Asia who practiced sedentary agriculture. A decisive change was brought about by the decision of the Soviet leadership in 1953 with the introduction of the Virgin Lands Campaign, which, among other things, provided for the agricultural cultivation of around 25 million hectares in northern Kazakhstan and made Kazakhstan an important producer of wheat and barley .

Kazakhstan is one of the largest exporters of wheat and flour. Thanks to favorable climatic conditions, Kazakhstan was able to achieve a record harvest of 22.7 million tons of wheat in 2011 and increased exports to the CIS countries, the Middle East, North Africa and the European Union. In 2013, production, which is largely concentrated in the Aqmola , North Kazakhstan and Qostanai areas, was 13.9 million tons. In Turkistan , cotton is also planted, the production of which was around 131,000 tons in 2012 and is therefore much lower than the cotton production in neighboring Uzbekistan .

Secondary sector - mining and industry

Mining and raw materials

The production of oil is the main source of income for the state, which exercises control over the sector through the state oil company KazMunayGas . The production of crude oil has more than doubled since 2000 and reached the previous national oil production maximum in 2013 with a total output of 81.8 million tons, making Kazakhstan one of the 20 largest oil producers worldwide. Around 70 percent of the oil reserves are located in western Kazakhstan - in the provinces of Aqtöbe , Atyrau , Mangghystau , Karagandy , Qysylorda and western Kazakhstan - mainly on the coasts of the Caspian Sea . The largest of the around 150 active oil fields include Karachaganak and Tengiz , which together produce around 40 percent of Kazakhstan's oil. The Kashagan field , which was only discovered in 2000, is one of the greatest new discoveries of the last decades. It is the largest oil resource outside the Middle East and the fifth largest field on earth in terms of reserves. The development of Kashagan, which has so far cost around 43 billion US dollars, is being driven by an international consortium. The start of funding has already been postponed several times and was set for 2016.

Oil and gas reserves in Russia and Central Asia

Development of oil and gas production
year	2000	2007	2008	2009	2010	2011	2012	2013	2014
Petroleum [million t]	35.3	67.1	70.7	76.5	79.7	80.1	79.2	81.8	80.8
Natural gas [billion m 3 ]	11.5	29.6	32.9	35.9	37.4	39.5	40.3	42.4	43.4
Data: Kazakhstan in Figures, p.16 (PDF)

Kazakhstan has twelve percent of the world's uranium reserves and has been the largest uranium producer in the world since 2009. With a production volume of 22,451 tons, Kazakhstan's share of world production was around 38 percent in 2013. The state-owned company Kazatomprom is also the world's largest uranium mining company and operates all 17 mines in Kazakhstan, twelve of them as joint ventures with international partners. Fire opals were also found in Kazakhstan during the extraction of uranium .

Significant copper deposits are found primarily in the north and east of the country. The leading companies in copper mining are KAZ Minerals with an annual output of around 300,000 tons of copper, Kazzinc with an output of 51,200 tons, Aktyubinsk Copper Co. with a copper production of 53,700 tons and Polymetal with 6,000 tons. With a production volume of 493,000 tons of copper in 2013, the country ranks twelfth in global production. Gold is often extracted as a by-product of copper mining . There are numerous gold deposits, around half of which are already operating or under development. With a production volume of around 36.6 tons (2011), estimated reserves of 2,200 tons and resources of almost 9,200 tons, the country is one of the 20 largest gold producing countries. The two main miners are Kazzinc, which extracts gold as a by-product from the lead and zinc mines, and the mining company KAZ Minerals (formerly Kazakhmys), which also extracts gold only as a by-product of copper production.

Kazakhstan is the second most important producer of chromite after South Africa . Of the two Kazakh chromite producers, Kazchrome , a subsidiary of Eurasian Natural Resources , with its plant in Aqtöbe is by far the leading company. ENCR uses the raw material itself for the production of ferrochrome and exports most of it to China. With an annual production of 4,000 tons of chromite, Kazakhstan is the second largest producing country and with estimated reserves of 230,000 tons, the country has the world's largest chromite reserves.

Kazakhstan has expanded coal production in recent years in order to satisfy the ever-increasing demand. With an annual production of more than 120 million tons, the vast majority of which is for domestic consumption, Kazakhstan ranks eighth in the world. Around four percent of the world's coal reserves are stored in the 16 large coal deposits. Most of the estimated reserves of coal lies in the Karaganda - Ekibastus- and Tengiz Korzhankolskogo basin in the center of the country, the brown coal share is relatively low. Kazakhstan's economy is extremely dependent on coal - 76 percent of electricity is generated by coal. The mining of iron ore has been intensified in recent years. While only 16 million tons were mined in 2000, the amount of iron ore mined in 2010 was already more than 50 million tons, a large part of which is exported to neighboring Russia. The domestic steel industry is the main consumer of both ore and coal, which are the main steelmaking resources.

Another raw material that is mined in Kazakhstan is bauxite , which is used to manufacture aluminum . Aluminum Kazakhstan is the largest producer of aluminum, which, together with bauxite, is mainly exported to Russia and China. There are also large deposits of asbestos , lead , bismuth , manganese , silver as well as titanium and tungsten .

Energy industry

The Ekibastus power plant is the largest power plant in the country

In 2013, electricity generation was 92.6 TWh and has thus increased by 45 percent in the last ten years. Most of the electricity is generated by fossil fuels (89 percent), another ten percent is generated by hydropower and one percent of the electricity is produced by renewable energies . Of this, 75 percent was used by industry and agriculture, followed by private households with 11 percent and transport with a consumption of two percent.

Development of electricity production
year	2007	2008	2009	2010	2011	2012	2013
Electricity production [TWh]	76.6	80.3	78.7	82.6	86.6	90.6	92.6
Data (Excel file)

Most of the fossil energy is generated in coal-fired power plants , of which the Ekibastus power plant in the east of the country is the largest. It is located in the Pavlodar region, which alone produces around 44 percent of Kazakhstan's total electricity generation. There are also some hydropower plants along the Irtysh , for example at the Öskemen dam , the Schülbi dam and at the Buchtarma reservoir . After the Aqtau nuclear power plant was shut down in April 1999, the Kazakh government had been planning to build new reactors for some time. In May 2014, Kazatomprom reached an agreement with Rosatom to build a nuclear power plant with VVER reactors near Kurchatov in eastern Kazakhstan.

Power generation is largely privatized and regional energy companies handle the transmission, distribution and supply of electricity at the regional level. The state-owned Kazakhstan Electricity Grid Operating Company (KEGOC) is responsible for transmission on an interregional and international level and controls the Kazakh power grid .

Industry

Balkhaschzwetmet is a metallurgical plant in Balkhash and belongs to KAZ Minerals

Industrial production has increased in recent years, increasing by 2.5 percent to $ 117.2 billion in 2013. The main sectors of Kazakhstan's industrial production are the promotion of mineral resources, the manufacturing industry and the production and distribution of electricity and gas, the promotion of natural resources with a value of nearly $ 70 billion clearly dominated. Manufacturing was valued at $ 38.5 billion, with metallurgy ($ 11.5 billion), food production ($ 6.4 billion), mechanical engineering ($ 5.6 billion) and the production of coke and petroleum products ($ 5.2 billion) are the most significant areas. The production and distribution of electricity and gas was valued at around $ 6.1 billion.

The chemical industry is one of the most important branches of industry in the country and one of the largest suppliers of raw materials, semi-finished products and materials for other branches of the economy. The locations of the chemical industry are closely related to the deposits of the necessary raw materials and are based on the rich phosphorite deposits , the development of the oil and gas industry, the reprocessing of sulphurous gases from metallurgy and large deposits of various salts .

The most important areas of mechanical engineering include the manufacture of machine tools , agricultural machinery (tractors and harvesters), transport machines (locomotives and wagons), equipment for information and communication technology, heavy machinery and industrial equipment. Priority is given to mechanical engineering for oil and gas production plants.

The steel industry in Kazakhstan, which was located here in the Soviet Union, is also important . The production of crude steel has been declining for several years and was only 3.275 million tons in 2013. The steel group ArcelorMittal operates two plants in the cities of Aqtau and Temirtau , of which the Temirtau plant is the largest in Central Asia. There are also steelworks in Pavlodar ( KSP Steel ) and, since 2013, in Qostanai ( Evraz Group ).

Tertiary sector

Finance

Almaty is the country's financial center

See also : List of banks in Kazakhstan

Kazakhstan's banking system is the most developed in Central Asia. At the top of the system is the Kazakh National Bank, which implements the state's monetary and credit policy, regulates and controls the currency, and oversees the credit institutions . At the commercial bank level, the largest banks dominate the market, led by Kazkommertsbank with a market share of 24 percent. Other institutions of national importance are the Eurasian Bank , the Halyk Bank and the Temirbank as well as the Alliance Bank , the ATFBank , Bank CenterCredit and the Nurbank .

The 2008 financial crisis plunged Kazakhstan's banking system into a serious crisis, the effects of which continue to this day. The Kazakh state had to use around ten billion US dollars from the National Fund Samruk-Kazyna to rescue and nationalize the Alliance Bank, the BTA Bank and the Temirbank. The reasons for this collapse are varied, one of which is that Kazakh banks borrowed large sums of money abroad to pay off their loans. The banks took on cheap and short-lived debts on the capital markets in Europe in order to issue loans with higher interest rates on the domestic market. In September 2008, the Kazakh banks had accumulated foreign loan debts amounting to twelve billion US dollars.

Kazakh company

The table shows the ten largest Kazakh companies according to sales for the 2013 financial year.

rank	Surname	Headquarters	Sales (billion ₸)	Branch
1	Samruk-Kazyna	Nur-Sultan (until 2019 Astana)	5048.2	Funds
2	Tengizchevroil	Atyrau	3841.5	oil and gas
3	Karachaganak Petroleum Operating	Aqsai	1085.0	oil and gas
4th	Eurasian Natural Resources	Luxembourg	978.0	raw materials
5	CNPC-AktobeMunaiGas	Aqtobe	669.8	oil and gas
6th	Mangghystaumunaigas	Aqtau	643.1	oil and gas
7th	KAZ Minerals	London	471.5	raw materials
8th	Kazzinc	Öskemen	389.3	raw materials
9	KazGerMunai	Kyzylorda	372.4	oil and gas
10	ArcelorMittal Temirtau	Temirtau	304.7	steel

currency

Banknotes of the Kazakh currency tenge (₸)

The inflation rate has been falling for years and was around 4.8 percent in 2013. While the inflation rate was well over ten percent in the years after independence from the Soviet Union, the economic upswing of the 2000s also succeeded in reducing inflation and stabilizing it at around seven percent. After a jump to almost 20 percent during the financial crisis in 2007, inflation fell again and in 2013 was below the five percent mark for the first time in a long time.

Development of the inflation rate
year	2007	2008	2009	2010	2011	2012	2013
Inflation rate [%]	18.8	9.5	6.2	7.8	7.4	6.0	4.8
Data: Kazakhstan in Figures, p. 14 (PDF)

After Kazakhstan's independence from the Soviet Union, the Kazakh tenge was introduced as the new national currency on November 15, 1993 . In September 2013, the Kazakh National Bank decided to peg the tenge exchange rate to the euro , the US dollar and the Russian ruble . Due to the increasing decline in the price of the Russian ruble , the National Bank was forced to devalue the tenge by 19 percent against the US dollar in February 2014. While the exchange rate against the euro was largely stable in 2013, it has risen steadily since the beginning of 2014 and reached the highest level of all time in February 2016 with an exchange rate of 398.45 tenge.

Exchange rate development of the tenge
year	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Exchange rate [1 EUR]	167.75	177.04	205.67	195.67	204.11	191.67	202.09	238.10	245.80	378.63
Data: Official Foreign Exchange Rates on average for the period

Foreign trade

export

In 2013, the foreign trade turnover was 131.4 billion US dollars, with exports being significantly stronger than imports . Due to the high price development of the main export products oil, gas and metals, Kazakh exports have grown strongly in recent years, but this could not continue in 2013. Exports fell again by 4.5 percent, while imports continued to increase by 5.3 percent.

Due to the country's high resource wealth, raw materials also clearly dominate the export statistics. With total exports of $ 82.5 billion, mineral products, including oil and natural gas, were valued at $ 65.8 billion, followed by metals and metallic products valued at $ 7.7 billion Chemical, food and agricultural products ($ 2.7 billion) were worth $ 3.4 billion. The main export destinations are Italy ($ 16.5 billion), the People's Republic of China ($ 14.4 billion), the Netherlands ($ 9.9 billion), Russia ($ 5.9 billion) and France ($ 5 .5 billion). According to the Statistics Agency of Kazakhstan, exports to Germany amounted to 0.428 billion US dollars, whereas the Federal Statistical Office put German imports from Kazakhstan in 2013 at 4.3 billion euros .

rank	Country	2011 [billion $]	2012 [billion $]	2013 [billion $]
	All in all	88.3	86.4	84.7
1	Italy	15.0	15.4	16.5
2	People's Republic of China	16.3	14.2	14.4
3	Netherlands	6.6	7.3	9.9
4th	Russia	7.7	6.1	5.9
5	France	5.4	5.6	5.5
6th	Switzerland	5.0	4.9	4.3
7th	Austria	3.9	5.0	3.6
8th	Canada	2.6	3.1	2.7
9	Turkey	2.6	2.7	2.6
10	Romania	2.3	3.0	2.4

import

With a value of 48.9 billion US dollars, foreign imports to Kazakhstan were significantly lower than exports. When it comes to imported goods, machinery and equipment come first with a value of $ 18.9 billion, and chemical products with a value of $ 6.4 billion represent another important factor. Other imported goods are mineral products (including oil and gas) valued at $ 6.1 billion; and food and agricultural products ($ 4.6 billion). The main supplier countries are dominated by Russia, which in 2013 delivered goods worth $ 18.0 billion and thus delivered almost 40 percent of all imported goods. Other important import partners are the People's Republic of China ($ 8.4 billion), Germany ($ 2.5 billion), Ukraine ($ 2.3 billion) and the United States ($ 2.1 billion).

rank	Country	2011 [billion $]	2012 [billion $]	2013 [billion $]
	All in all	37.9	46.4	48.8
1	Russia	16.2	17.0	18.0
2	People's Republic of China	5.0	7.4	8.4
3	Germany	2.1	3.8	2.5
4th	Ukraine	1.7	2.9	2.3
5	United States	1.7	2.1	2.1
6th	South Korea	0.6	1.0	1.3
7th	Japan	0.6	0.9	1.1
8th	Italy	1.1	1.0	1.0
9	France	0.7	0.7	1.0
10	Uzbekistan	0.8	0.8	1.0

Web links

• MINISTRY OF ECONOMY AND BUDGET ( Memento from December 5, 2014 in the Internet Archive ) (English, Kazakh and Russian)
• Ministry of National Economy of the Republic of Kazakhstan Committee on Statistics (English, Kazakh and Russian)
• The National Bank of Kazakhstan (English, Kazakh and Russian)
• German business delegation for Central Asia
• Business portal : Kazakhstan (OWC publishing house for foreign trade)

Individual evidence

1. ↑ International Monetary Fund: Republic of Kazakhstan - Selected Issues (PDF, English)
2. ↑ Trading Economics: Kazakhstan - Unemployment Rate - 2014 (English)
3. ↑ ^{a b c} Ministry of National Economy of the Republic of Kazakhstan Committee on Statistics: Socio-economic development of the Republic of Kazakhstan (English, PDF), accessed on December 21, 2015.
4. ↑ ^{a b} Ministry of National Economy of the Republic of Kazakhstan Committee on Statistics: Kazakhstan in Figures (English, Word file)
5. ↑ German Business Delegation for Central Asia: Kazakhstan in Figures (PDF)
6. ↑ Kazakhstan and EU sign extended partnership agreement ( Memento of the original from December 5, 2014 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. 
7. ↑ Kazakhstan is the 162nd member of the WTO
8. ↑ Euronews: World Economic Forum in Davos: Kazakhstan wants to be part of the new industrial age
9. ↑ Kazakhstan's Agricultureafter Two Decades of Independence (PDF, English)
10. ↑ FAOSTAT: Production of commodity in Kazakhstan 1993 - 2013 (English)
11. ↑ US Energy Information Administration: Kazakhstan - Overview (PDF, English)
12. ↑ The Economist: Cash all gone (English)
13. ↑ ^{a b} World Nuclear Association: Uranium and Nuclear Power in Kazakhstan (English)
14. ↑ Copper Development Association: Annual Data 2014: Copper Supply & Consumption - 1993–2013 (PDF, English)
15. ↑ London Bullion Market Association: Kazakhstan's Gold Mining Sector and the New Regulation on Gold Sales (PDF, English)
16. ↑ United States Geological Survey: Chromium (PDF, English)
17. ↑ Coal Age: Kazakhstan Prepares to Grow Coal Production ( Memento of the original from December 5, 2014 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. (English) 
18. ↑ Association of Mining and Metallurgical Enterprises: Main Mineral Resources of Kazakhstan ( Memento of the original from December 5, 2014 in the Internet Archive ) Info: The archive link was automatically inserted and not yet checked. Please check the original and archive link according to the instructions and then remove this notice. (English) 
19. ↑ Ministry of National Economy of the Republic of Kazakhstan Committee on Statistics: Productions of section of manufacture and distribution of the electric power, gas and water in a cut of regions (Excel file, English)
20. ↑ ^{a b} Energy Regulators Regional Association: Membership Proofiles: Kazakhstan ( Memento of March 21, 2007 in the Internet Archive ) (English)
21. ↑ ^{a b c} Delegation of German Business for Central Asia: Kazakhstan in Figures - Autumn 2014 (PDF)
22. ↑ Invest in Kazakhstan: Chemical Industry (English)
23. ↑ Kaznex Invest: Sectoral Brochure - Machinery Industry (PDF, English)
24. ↑ World Steel Association: Crude steel production, 1980–2013 ( Memento from April 20, 2015 in the Internet Archive ) (PDF, English)
25. ↑ ArcelorMittal: ArcelorMittal Temirtau - Steel Plant (English)
26. ^ German Society for International Cooperation: Kazakhstan: Economy at a Glance
27. ↑ KIMEP: The Impact of the Financial Crisis on the Banking System of Kazakhstan (PDF, English)
28. ↑ RAExpert: 10 крупнейших компаний по объему реализации продукции (Russian)
29. ^ National Bank of Kazakhstan: Official Foreign Exchange Rates on average for the period 2014
30. ↑ ^{a b} Ministry of National Economy of the Republic of Kazakhstan Committee on Statistics: Foreign trade of the Republic of Kazakhstan (PDF, English)