EDB investment portfolio


56 projects

$2 340,7 million

37.11% of the total

Kazakhstan is, along with Russia, the founder and largest member of Eurasian Development Bank, accounting for about a third of its charter capital (US $500 million).



Despite the downward trend in global oil prices in 2Q 2017, the external economic situation was more favorable compared to the same time last year. This reinforced the positive impulse from the new Kashagan field, where commercial production began in Q4 2016. GDP grew by 4.8% in 2Q 2017 from Q2 2016 (by 3.6% in 1Q 2017 y-o-y).

Economic activity in Kazakhstan was generally shaped by the following key factors:

  • In terms of value added:

The manufacturing industry continues as the major growth driver, led by mining (+13.0% y-o-y) and, to a lesser degree, by processing industries (+5.8% y-o-y). The traditional growth driver—retail trade—has yet to recover to its pre-crisis level. In the face of declining real average monthly wages, retail trade has taken a second seat to “transportation and warehousing” in shaping the growth dynamics of the service sector. The implementation of government measures to support the economy has ensured a consistently positive contribution of the construction industry to the GDP trend.

  • In terms of incomes:

According to a preliminary estimate of indicators adjusted for the GDP deflator, wages finally showed a positive growth in 2Q 2017 (up 1.6% from 2Q 2016), and the positive contribution of net income to GDP increased.

Market surveys conducted by both the Statistics Committee of the Kazakh Ministry of the National Economy and the National Bank of Kazakhstan indicate that respondents expect demand for final goods to continue growing in 3Q 2017 across all sectors of the economy. The Statistics Committee also mentioned positive job creation expectations in industry. The stable growth in investments makes up for the weak credit impulse by satisfying domestic demand. The headline leading indicator calculated by the Eurasian Economic Commission also signals continued growth in the cyclical component, as evidenced by positive expectations from agents of the industrial sector and the stock market.


Annual inflation remained at a steady level of 7.5% over all three months of 2Q 2017. Further slowdown in inflation was held back by the food component (9.7% vs. 2Q 2016), which was due to a short-term agricultural product supply shock. In the face of a stronger tenge, annual inflation in the non-food sector continued to slow and stood at 7.7% toward the end of 2Q 2017. Limited growth in utility rates (4.7% vs. 2Q 2016) restricted overall inflation growth.

Seasonal price reductions slowed the annual inflation rate in July-September 2017. The consumer price index (CPI) grew by 7.1% y-o-y in September 2017. A little less than half of respondents in the inflationary expectations survey published by the National Bank of Kazakhstan expect moderate price growth in the short term and believe the inflation rate will remain at the current level in the coming year (38% of respondents).

External Sector

The effect of the stronger real effective exchange rate of the tenge was offset in full by the favorable price situation in the international oil and metals market, which supported growth in the nominal export volume (up 43.5% vs. 2Q 2016). Despite moderate growth in the import volume in US dollars terms (19.1% y-o-y), the trade balance surplus increased by 2.4 times from 2Q 2016. The National Bank of Kazakhstan estimates that the launch of commercial production at the Kashagan field has boosted export revenue while also increasing the income earned by direct foreign investors. Dividend payouts to direct foreign investors increased by almost a quarter, which played a key role in creating the current account deficit (4.2% of GDP in 2Q 2017). More than one half of dividends received by foreign investors was reinvested in the Kazakh economy. Foreign currency revenue earned by the financial account in 2Q 2017 consisted of an influx of direct and portfolio foreign investments (including through the redemption of short-term foreign securities in which the government of Kazakhstan had invested previously). These operations made up for the outflow of foreign currency due to deposits by the corporate sector and households with foreign banks.

Fiscal Policy

The state budget deficit amounted to 0.7% of GDP in 2Q 2017 (vs. a deficit of 0.3% of GDP in 2Q 2016). Budget revenue grew at a faster rate (18.0% vs. 2Q 2016) than budget spending (16.6% y-o-y). Despite the growth in tax revenue (13.8% y-o-y), its share in the structure of revenue decreased by 2.2 percentage points to 59.9%. The share of incoming transfers increased by 7.2 percentage points to 36.7%. On the expenditure side, more than a half of all expenditures went toward education, healthcare, and social expenditures (55.2% of total spending). Investment spending in the public sector increased by 1.7 times from 2Q 2016. The rising expenses on acquiring financial assets are partly attributable to the government’s efforts to rehabilitate the financial system. The non-oil deficit was 10.2% of GDP in 2Q 2017.

Public debt rose by 3.5% since the beginning of 2017 to KZT 11.8 billion (24.1% of GDP) as of July 1, 2017. Public debt increased mainly through the issuance of medium-term state treasury bills as part of the initiative to institute a risk-free yield curve, and also via domestic debt of the National Bank through the issuance of notes to sterilize surplus liquidity.

Monetary Policy

In the face of stabilization of the domestic and foreign economic environments, the National Bank of Kazakhstan lowered its base interest rate from 11.0% to 10.5% in 2Q 2017. The TONIA rate mostly fluctuated around the lower limit of the interest rate range, reflecting a structural surplus of tenge liquidity. This in turn caused an increase in the volume of National Bank notes with maturity periods of 7, 28, 91, 182, and 364 days in circulation. In June 2017, faced with excessive volatility of the tenge to US dollar exchange rate, the National Bank of Kazakhstan intervened in the domestic foreign exchange market for the first time since August 2016 to satisfy excessive demand for US dollars and sold USD 101 million worth of foreign currency.

The National Bank of Kazakhstan’s consistent monetary policy and transparent communications policy are reinforcing the public’s trust in the national currency, as evidenced by changes in the savings habits of households. The gradual easing monetary conditions implemented by the National Bank of Kazakhstan since May 2016 has had an effect on the deposit market that is demonstrating a downward trend in weighted average interest rates of deposits in the national currency.

Despite the lower returns on national currency deposits, they remain an attractive investment option. The share of household deposits in foreign currency decreased from 62.2% at the end of 2016 to 57.1% at the end of August 2017. The weighted average interest rate for issued loans is following a sideways trend in the credit market in the face of the persistent risks of a growing share of nonperforming loans.

Kazakhstan is among the largest and one of sustainably developing economies among the Bank’s member states. The country aims to improve the competitiveness of its non-primary sectors, reduce energy consumption and attract investment.

EDB’s investment activities in Kazakhstan in 2013-2017 included, therefore, the following:

  • The Bank supports the State Programme for Accelerated Industrial and Innovative Development and is ready to take part in financing respective projects.
  • EDB involves in its investment projects in Kazakhstan international financial institutions, banks and investment funds as co-investors.
  • The Bank is ready to assist investment projects promoting new technology, the development of automobile engineering, the chemical sector, glass and pipe production, including by means of supporting joint ventures with other member states of the Bank. EDB is ready to support modernisation projects in mechanical engineering, petrochemistry, the power sector and light industry.
  • To develop export potential, the Bank will continue to support export-orientated projects in agriculture.

Almaty Headquarters

220 Dostyk ave., Almaty, 050051, Republic of Kazakhstan

Astana Representative Office

Astanalyk Business Centre, 11th floor, 33 Kunayev St., Astana, 010000, Republic of Kazakhstan