EDB cuts Kazakhstan 2026 GDP forecast to 5% after Tengiz accident

July 19, 2026 at 06:00 PM1 min

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The Eurasian Development Bank (EDB) lowered its 2026 GDP growth forecast for Kazakhstan to 5% from 5.2%, citing a temporary oil output drop at the Tengiz field after a technological accident. The bank improved its inflation outlook to 9.8% and the average tenge rate forecast to 497 per dollar, from 531. Non-oil sectors helped cushion the impact.

Growth Revision

The EDB cut its 2026 GDP growth forecast for Kazakhstan by 0.2 percentage points to 5%, attributing the revision to a temporary oil output decline at the Tengiz field following a technological accident in early 2026. Output began recovering in the second quarter, limiting the adjustment. The 2027 forecast was raised to 4.6% from 4.5%, supported by expected oil recovery and quasi-government investment.

Inflation and Currency Outlook

The bank lowered its 2026 year-end inflation forecast to 9.8% from 10.1%, citing tight monetary policy and macroprudential measures. Annual inflation slowed to 8.9% in the first quarter. The National Bank cut its base rate to 17% in June but signaled cautious further easing. The average tenge rate forecast improved to 497 per dollar from 531, helped by strong capital inflows and a stable current account.

Fiscal and Risk Factors

Budget transfers from the National Fund fell 44.8% in the first quarter, and the fiscal deficit was below expectations due to higher tax revenues. The EDB sees predominantly positive risks, including faster oil recovery and increased quasi-government investment. However, inflation risks remain from a possible lifting of the moratorium on utility tariffs and fuel prices.