Executive Summary

Kazakhstan recorded a foreign direct investment (FDI) inflow of $15.7 billion in 2024, marking an 88% increase over 2023 and the highest figure in its post-Soviet history. The inflow consolidates its position as the primary investment destination in Central and Northern Asia.

This report assesses Kazakhstan’s FDIs and economic outlook. Indeed, growth in investments resulted from substantial commitments to energy infrastructure. The extractive sector maintains its predominance, although capital is progressively diversifying into manufacturing, retail, telecommunications, and finance. Reliance on commodities and uneven regional development pose ongoing strategic risks.

Macroeconomic Overview

Kazakhstan’s GDP growth accelerated to 4.8% in 2024, supported by elevated FDI and infrastructure development. Investment-led stimulus improved trade throughout and industrial output.

Recent net inflows show a revival of investor confidence, despite previous market volatility. Non-resident holdings in the state securities market experienced growth from 454.7 billion to 1.079 trillion tenge, driven by yields between 13.8% and 16.7%.

Foreign participation on the Kazakhstan Stock Exchange (KASE) rose to 29.8%, reflecting liberalised access and Russian capital inflows. However, the market’s limited breadth requires more institutional involvement and a wider range of issuers.

Sector-Specific Analysis

Extractive Industries: The mining and hydrocarbon sectors attracted $6.4 billion in 2024. Tengiz and Kashagan continue to dominate capital allocation. Royal Dutch Shell, Chevron, and ExxonMobil remain critical stakeholders. Russia and China are expanding involvement, particularly in hydrocarbons and uranium.
Non-Extractive Sectors: Retail trade and vehicle repair received $5.3 billion, reflecting international retailer interest. The manufacturing, telecommunications, and financial services sectors also experienced expansion. Notable examples include Kaspi.kz and Halyk Bank, which offer forecasted returns of 15% and 19%, respectively.
Infrastructure and Energy: Investors directed substantial capital at gas processing facilities, pipelines, and logistics hubs. Renewables and digital infrastructure are gaining traction. These developments position Kazakhstan as a strategic transit hub.
Regional Distribution: Almaty leads with $5.8 billion in FDI, acting as the financial and commercial core. Oil and gas investment flowed into western regions. However, underfunding in the southern and central regions exacerbates socio-economic inequalities.
Strategic Companies: Key firms include Kazatomprom (26% growth potential), KazMunayGas (30%), KazTransOil (39%), Kazakhtelecom (34%), and Air Astana (42% post-IPO gain). These entities span energy, transport, and telecoms, offering both stability and high return potential.

SWOT Analysis

Strengths

Strong FDI performance in 2024 consolidates Astana’s regional leadership.
Infrastructure development improves industrial and transport capabilities.
Investor protection and regulatory transparency improve with institutional reform.
High-yield sovereign debt attracts international capital.

Weaknesses

Excessive concentration in extractive sectors exposes the economy to price shocks.
Uneven regional investment undermines social cohesion and national unity.
Shallow equity markets limit long-term capital formation.

Opportunities

Government policy targets $150 billion in FDI by 2029, with enhanced regional frameworks.
New investment avenues may emerge from the expansion of digital platforms and the shift to cleaner energy.
Institutional improvements could attract more strategic and long-term capital.

Threats

Geopolitical uncertainty, including Russia-related sanctions, affects regional risk
Persistent dependency on oil and gas threatens macroeconomic stability.
Limited technological diffusion hampers the competitiveness of small enterprises.

Conclusion

Kazakhstan’s record FDI inflow in 2024 reinforces its role as a regional economic anchor. While diversification is slowly happening, mainly in trade and industry, the economy remains dependent on extractive industries. Institutional reforms and investment promotion remain central to future resilience.

Astana needs a strategic plan to address regional inequality, develop its capital markets, and protect its economy from global shocks. The government believes it can achieve its long-term target of $150 billion in FDI by 2029 if the current momentum continues and they address structural vulnerabilities.

*Cover image: the flag of Kazakhstan (Credits: Freepik)

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Written by

Silvia Boltuc

SpecialEurasia Co-Founder & Managing Director. She is an International affairs specialist, business consultant and political analyst who has supported private and public institutions in decision-making by providing reports, risk assessments, and consultancy. Due to her work and reporting activities, she has travelled in Europe, the Middle East, South-East Asia and the post-Soviet space assessing the domestic dynamic and situations and creating a network of local contacts. She is also the Director of the Energy & Engineering Department of CeSEM – Centro Studi Eurasia Mediterraneo and the Project Manager of Persian Files. Previously, she worked as an Associate Director at ASRIE Analytica. She speaks Italian, English, German, Russian and Arabic. She co-authored the book Conflitto in Ucraina: rischio geopolitico, propaganda jihadista e minaccia per l’Europa (Enigma Edizioni 2022).

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Kazakhstan: Foreign Direct Investments (FDIs) and Economic Outlook