EDB investment portfolio


60 projects

$2 700.5 million

39.06% 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).



Favorable external conditions and domestic drivers support Kazakhstan’s GDP growth, which amounted to 4.1% YoY in the quarter (+3.6% YoY in 1Q 2017).

Growing oil prices provide support to both the manufacturing sector (+5.4% YoY) and the service sector (+4.0% YoY). Growth in wholesale and retail trade in 1Q 2018 to 6.2% YoY (+2.8% YoY in 1Q 2017) indicates a recovery of consumer confidence amid increasing wages and slowing growth in consumer lending. Another 1Q 2018 growth driver was investments, which increased by 39.5% YoY. After declining for two quarters, the construction sector regained its status as a growth driver (+5.9% YoY).

Net exports also contributed to GDP growth. Increasing exports in volume terms were accompanied by recovering imports. Domestic demand is also contributing to GDP growth.

The EEC aggregate leading indicator signals that economic growth likely accelerated in the first months of 2Q 2018, which is backed up by growth in the trade and transportation sectors. According to a survey conducted by the National Bank of Kazakhstan, businesses are optimistic about future demand and plan to increase production, including creating new jobs. The lending recovery should also contribute to GDP growth.


In 1Q 2018, inflation stayed within the new 5.0–7.0% target range set for end 2018. Low inflation resulted from a slowdown in food prices (to 5.6% YoY) and moderate growth in tariffs for public utilities (6.2% YoY). Price increases in the nonfood segment are still above the target (8.5% YoY). This was mainly attributed to increases in fuel prices and higher excise taxes for tobacco and alcohol products. 12-mo inflation amounted to 6.6% in 1Q 2018.

According to the National Bank survey, inflationary expectations have decreased. If one-year ahead inflation was expected at 7.7% in November 2017, this estimate decreased to 5.8% in March 2018. The number of respondents expecting price growth for consumer goods to accelerate was down in 1Q 2018. Volatility in the exchange rate increased in early April amid growing uncertainty in regional financial markets, but it is unlikely to affect the annual inflation figures.

External Sector

Amid a stable real effective exchange rate and increasing global prices for key goods exported by Kazakhstan, the country’s current account deficit was sharply reduced in 4Q 2017 (3,9 times compared to 4Q 2016). There was a two-fold increase in the balance of payments surplus, that more than compensated for the increase in revenues from direct foreign investors. Moreover, in 4Q 201718.2% of non-residents’ income from direct investments was reinvested in the Kazakhstan economy.

There was a capital outflow in the financial transactions account as a result of the government buying non-resident short-term securities, partially using National Bank reserves for this purpose. Moreover, the increased inbound direct foreign investments and maturing of deposits placed by businesses and households with foreign banks contributed to an increase in the net capital inflow in 4Q 2017.

Fiscal Policy

There was a budget surplus in 1Q 2018 of 0.8% of GDP, compared with a budget deficit in 1Q 2017 of 0.1% of GDP. Key sources of budget revenues were taxes and inflows from the National Fund. The growth of both tax revenues (+11.6% YoY) and transfer payments (+30.0% YoY) slowed on a year-on-year basis, while budget spending growth accelerated. Whereas spending decreased by 0.7% YoY in 1Q 2017 it increased by 13.5% YoY in the reporting period. The acceleration was mainly attributed to increased social spending. Public spending on healthcare was up by 23.6% YoY and spending on social security increased by 19.1% YoY.

The government debt increased by 6.2% QoQ in the first quarter, mostly covered by notes issued by the National Bank. The rapid increase in government domestic debt was partially caused by excessive bank liquidity and final measures taken under the Bank Recovery Program. The National Bank issued short-term securities, while the Ministry of Finance offered its 10-year and 15-year notes to optimize the yield curve. State bonds were issued by local authorities to raise funds for the Nurly Zher residential construction program. The government’s external debt decreased as scheduled repayments were made.

Monetary Policy

Decreased inflationary expectations and signs of disinflation are encouraging the regulator to speed up the transition to neutral monetary conditions. The base rate was decreased three times in 2017, and it was reduced on two more occasions in 1Q 2018. The base rate was decreased from 10.25% to 9.25%. The TONIA rate, which serves as a benchmark for the regulator, stayed at the bottom of the interest rate range, indicating excessive liquidity in the system.

Amid restructuring of the banking sector, the amount of deposits excluding current and non-residents’ accounts decreased by 2.1% over 1Q, while the amount of loans was down by 1.1%. The share of loans overdue 90 days or more accelerated its growth rate. It accounted for 10.0% of the total loan portfolio in 1Q 2018, compared to 9.3% at the end of 4Q 2017. Nevertheless, banks getting rid of bad debts increases the potential of the banking sector and strengthens people’s confidence in banks. The amount of newly-issued loans increased by 23.0% YoY in 1Q 2018, as compared to 3.6% YoY growth in 1Q 2017. The amount of newly-raised bank deposits increased by 25.9% YoY. 

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.
  • Construction of Unit 3 at Ekibastuz GRES-2 Power Plant
    Funding of supplies from JSC Sokolov-Sarbai Mining and Processing Integrated Works (Kazakhstan) to Magnitogorsk Iron and Steel Works
  • Алтыналмас
  • Богатырь Комир 2011
    Богатырь комир 2013
  • Вагоноремонт Казахстан
    Ветряки Казахстан
  • Заречное 2007
    Заречное 2013

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