Story perspectives

Kazakhstan's Manufacturing Sector Faces Decline Amid Rising Costs

9/12/2025

Summary

Story summary

Kazakhstan's manufacturing sector saw a significant decline in August 2025, with business activity at its lowest since 2021 due to rising costs and weak demand.
Inflation hit 12.2%, leading the National Bank to keep a high policy rate of 16.5%, increasing financing costs for businesses.
A new tax code raised extraction royalties on metals, adding pressure on the industry and affecting downstream metallurgy.
A $400 million cotton-to-textile project with Chinese partners is in progress, expected to create jobs and enhance exports by late 2025.
Manufacturing output grew by 6.8% in 2024, but new orders dropped in August 2025, indicating potential stagnation.

History

Historical Context

Kazakhstan gained independence from the Soviet Union in 1991, initiating significant economic reforms. By 2024, manufacturing output rose by 6.8%, but inflation reached 12.2% in 2025, leading the National Bank to set a 16.5% policy rate. The recent decline in business activity, worsened by a new tax code, highlights ongoing economic challenges and the need for sustainable growth strategies.

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Story summary

Kazakhstan's manufacturing sector saw a significant decline in August 2025, with business activity at its lowest since 2021 due to rising costs and weak demand.
Inflation hit 12.2%, leading the National Bank to keep a high policy rate of 16.5%, increasing financing costs for businesses.
A new tax code raised extraction royalties on metals, adding pressure on the industry and affecting downstream metallurgy.
A $400 million cotton-to-textile project with Chinese partners is in progress, expected to create jobs and enhance exports by late 2025.
Manufacturing output grew by 6.8% in 2024, but new orders dropped in August 2025, indicating potential stagnation.

1 / 2