EDB investment portfolio


54 projects

$2 270 million

40.0% 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).



Stabilization of the external economic background, the recovery in global oil and metal prices in late 2016 – early 2017, as well as the launch of the Kashagan deposit in 4Q 2016, added momentum to the government’s stimulative measures that started in 2016. GDP has grown for a third consecutive quarter. In 1Q 2017, GDP grew by 3.8% YoY (2.3% YoY in 4Q 2016).

Overall, economic activity in Kazakhstan was driven by the following key factors:

on the value added side: the production revival in metallurgy and oil refining was driven by growth in oil, coal and ore production. As a result, the growth in the industrial production index in 1Q 2017 was 6.3% YoY (1.1% in 4Q 2016). The strong contribution of the construction sector (7.1% versus 1Q 2016) was driven by the government’s support measures. Against a background of limited consumer activity, the service sector has not yet recovered to pre-crisis levels (2.0% YoY versus 1Q 2016).

on the income side: according to preliminary estimates adjusted by GDP deflators, 1Q 2017 saw salaries stabilize (-0.1% versus 1Q 2016) as well as a positive contribution to GDP from net profit and production taxes.

The output gap in 1Q 2017 was negative and we estimate it at -1.8%.

The faster growth in the short-term economic indicator in April – May 2017 to 7.3% YoY implies that business activity continued to grow in 2Q 2017. The consolidated leading indicator calculated by the EEC forecasts an acceleration in economic activity in the republic in the late 2nd - early 3rd quarters of 2017. That is evidenced by positive shifts in the external economic environment, improved expectations about the level of business in manufacturing, and the optimistic mood of trading firms. The household survey on economic prospects carried out by the National Bank of the RoK also evidences positive expectations among economic agents.


In 1Q 2017, inflation was largely driven by the short-term supply shock in the food markets (9.4% YoY). Inflation in the non-food sector slowed with every month that passed, amounting on average to 8.9% YoY for the 1st quarter of 2017. The limited growth in service tariffs (4.8% versus 1Q 2016) kept down overall price growth. Inflation in 1Q 2017 reached 7.8% YoY, within the target range of 6.0-8.0%.

In April – May 2017, the inflation slowdown in the non-food sector continued amid strengthening of the tenge. The momentum set by the short-term supply shock led to 9.7% price growth for food. As a result, inflation was 7.5% YoY as of the end of the 2Q 2017.

Exchange Rate

In 1Q 2017, the effective exchange rate of the tenge strengthened both in nominal (8.9%) and in real (14.9%) terms compared with 1Q 2016. In addition, compared with the CIS currencies, the REER weakened by 7.7% YoY, while the NEER weakened by 8.6% YoY. That partially stimulated growth in Kazakhstani exports to the EDB countries totalling 41.2% (versus 1Q 2016). The improvement in the tenge’s REER relative to the currencies of the non-CIS countries was offset by the favourable situation in the global stock markets. The export growth to non-CIS countries was 29.0% YoY. Overall, the positive balance of goods and services doubled compared with 1Q 2016. The expansion of the current account deficit in dollar terms in 1Q 2017 was driven by the doubling in dividend payments to direct foreign investors. Those were more than covered by the net inflow of foreign direct investments. In 1Q 2017, the current account deficit was 4.5% of GDP (4.7% of GDP in the preceding year).

The strengthening of the KZT vs the USD continued in April 2017. In May, the increased volatility in global oil prices impacted the domestic currency market. May saw surges in the KZT - USD exchange rate. As soon as the situation in the global oil market stabilized, the tenge started to regain its position. The National Bank of the RoK allowed the market to reach a new equilibrium level, there being no currency interventions in April – May 2017.

Fiscal Policy

Despite the higher-than-anticipated growth in budget revenues, expenditures in nominal terms increased only marginally compared with the previous year. That led to a relatively balanced budget in 1Q 2017, with a deficit of just 0.1% of GDP (4.5% in 1Q 2016). The non-oil deficit was 6.1% of GDP, while 25% growth in budget revenues was primarily driven by the receipt of the targeted transfer from the National Fund to support the recovery in the banking system (58.7% growth compared with 1Q 2016). Tax revenues grew by 14.3% YoY. The increase in pensions and benefits in January 2017 increased social security expenses by 11.5% versus 1Q 2016. The latter was more than compensated for by reduced financing for other budget items. As a result, budget expenditures declined by 0.7% YoY. The state debt increased in 1Q 2017 by 4.4% compared with the start of the year, to reach KZT 11.9 billion (25.5% of GDP). It increased mainly due to growth in domestic debt (2.3% compared with the start of the year) and National Bank debt (27.0%), which has arisen due to the initiative to build a risk-free yield curve.

Monetary Policy

Against a background of the stabilizing domestic and foreign economic environment, the National Bank of the RoK reduced the base rate from 12.0% to 11.0% in 1Q 2017. The TONIA rate varied within the set range, reflecting high volatility in the first half of the first quarter, which was driven by demand for tenge liquidity by money market players. Against a background of excessive liquidity, in order to keep the money market rate within the set range, the National Bank of the RoK continued to increase the volume of notes outstanding.

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