EDB investment portfolio


59 projects

$2 696.8 million

40.54% 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).



The improvement of the global economy played a catalytic role in the restored growth of Kazakhstan’s economy. The sudden, rapid growth of the cyclical component is a deferred effect of timely implemented anti-crisis measures that prevented the economy from plunging into recession. In the face of rising world prices for metals and oil, the strengthening of demand from trading partners was key to the rapid restoration of economic growth. According to the preliminary assessment of the Ministry of National Economy of the Republic of Kazakhstan, GDP growth in 2017 accelerated to 4.0% (compared with 1.1% in 2016).

On the whole, economic activity in Kazakhstan was influenced by the following main factors:

  • in the context of the industrial and service sectors’ increasing growth potential, the state’s stimulatory role declined in the second half of 2017. As a result, the volume of construction works financed mainly from public funds grew in 2017 by only 1.9% compared with 2016 (the figure for the previous year was 7.9%). Industrial sector growth accelerated to 7.1% YoY (compared with a decline of 1.1% YoY in 2016). Improvements in indicators were achieved both due to the mining industry and manufacturing. If the former is a consequence of a favorable price environment on the world oil market and Kashagan’s high productivity, the latter is the result of the implementation of the State Industrialization Map and the multiplier effect trickling down the value chain from mining industries to manufacturing.
  • according to preliminary indicators adjusted for the GDP deflator, there was an increase in enterprises’ payroll and net profit. Coupled with a further slowdown in inflation, this creates the conditions for real income growth following a protracted negative trend.
  • the contribution of households to GDP growth during 2017 was reduced against the background of a reduction in real wages. Active consumer lending maintained positive consumption trends. In January-November 2017, the volume of newly issued loans to individuals increased by 1.5 times compared with the same period in 2016. Investments saw stable growth, and the contribution of exports gradually increased during 2017. Real imports have not yet recovered to the pre-crisis level.

The composite leading indicator calculated by the Ministry of National Economy signals that, in the first months of 2018, one should not expect accelerated growth rates. Economic agents express neutral expectations about short-term prospects in the services sector and somewhat restrained sentiment regarding the demand for finished products. Weak credit impulse, as a result of restructuring in the banking sector, also limits potential growth.


During 2017, inflation developed within the target range, set at 6.0%-8.0%. Despite short-term shocks in the supply of vegetable products and petroleum products, and increased volatility of the tenge’s exchange rate against the US dollar, annual inflation followed a steady downward trend during 2017. In January 2017 the 12-month inflation level stood at 7.9%, and in December 2017 it came close to the middle of the target range at a level of 7.1%. Consistent monetary policy and an adherence to a floating exchange rate policy have prevented short-term shocks from significantly increasing annual inflation.

According to a survey published by the National Bank of the Republic of Kazakhstan, in December 2017 the number of respondents expecting an acceleration in inflation both in the short and medium term decreased. The quantitative estimate of inflationary expectations for the year ahead was 7.1%.

External Sector

The appreciation of the tenge’s real effective exchange rate was offset by a favorable price situation on the world oil and metals markets, ensuring growth in the nominal volume of exports (26.9% compared with the first nine months of 2016). Under conditions of a moderate increase in the value of imports (10.4% YoY), the trade surplus rose by a factor of 1.8 compared to the first nine months of 2016.

The launch of commercial production at the Kashagan field, on the one hand, contributed to the growth of export earnings, and, on the other hand, to an increase in the incomes of foreign direct investors. Dividends paid to foreign direct investors increased almost 1.5 fold, thereby playing a key role in the creation of the current account deficit, which for the first nine months of 2017 was 4.2% of GDP.

A little less than a quarter of the dividends received by foreign investors were reinvested in the Kazakh economy. Foreign currency earnings on the financial account for the first nine months of 2017 were driven by a net inflow of direct and portfolio foreign investments (including the repayment of short-term foreign securities in which the government of the Republic of Kazakhstan had invested earlier). These operations covered the outflow of foreign exchange funds driven by the placement of corporate sector and household assets in foreign banks.

Fiscal Policy

The start of 2H 2017 was marked by sharp growth in the state budget deficit. In January-June 2017, the budget deficit stood at KZT 0.1 trillion, but in January-July 2017 it grew to KZT 1.1 trillion. In July 2017, a targeted transfer was made from the republic budget fund to Problem Loan Fund JSC of KZT 2.1 trillion (4.5% of GDP). The source of this operation’s financing was a targeted transfer to the republic budget from the National Fund of the Republic of Kazakhstan of KZT 1.1 trillion, as well as the issue of medium-term and long-term state treasury bills of KZT 1.0 trillion. In 4Q 2017, expenses were reduced, which, against the backdrop of GDP growth, narrowed the budget deficit to the target set for 2017 of 2.9% of GDP.

Domestic debt grew by 32.1% in 2017 compared to 2016. A year earlier, its level fell by 2.1%. The National Bank’s domestic debt is a result of the issue of notes with the goal of sterilizing excess liquidity. Against a background of nominal GDP growth and the reduction of external debt, the ratio of public debt to GDP was approximately at the same level as for 2016.

Monetary Policy

During 2017, the base rate was reduced on three occasions from 12.0% to reach 10.25%. The TONIA rate, which is a market benchmark for the monetary authorities, was close to the lower boundary of the interest rate range during 2017, reflecting excess liquidity in the system. The net balance of liquidity withdrawal operations at the end of December 2017 was KZT 2.4 trillion. Against a background of increased volatility of the tenge-US dollar rate, the National Bank of the Republic of Kazakhstan intervened on the domestic market in June, August, September and October. However, its actions were aimed exclusively at smoothing excess demand for foreign currency. The National Bank of the Republic of Kazakhstan’s share of foreign exchange operations in the total volume of exchange trades in 2017 amounted to 1.7%.

In the financial sphere, the measures taken to improve the banking sector are consistent with the objectives of monetary policy and as such do not carry any devaluation risks or risks of accelerating inflation.

The active restructuring of the banking sector, which began in the second half of 2017, kicked off the process of cleansing commercial banks’ balance sheets of problem loans. At the beginning of the campaign to improve the financial sector, the share of overdue loans was 12.8%, and by the end of December 2017 it had fallen to 9.3%.

A decrease in banking assets (down 5.5% in November 2017 compared with December 2016) and loan portfolio (down 11.9% in November 2017 compared with December 2016) is a result of the transfer of distressed assets from the banking system to the Problem Loans Fund, as well as the restructuring of the banking system. In this context, a certain deterioration in the assets of the banking sector is inevitable, but that is a short-term phenomenon, as the measures taken will free up banking sector potential and revive lending activity.

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