AGP Executive Report

Growth and Investment: Kazakhstan’s economy expanded 4.2% in the first nine months of 2026, led by non-oil sectors, which grew 5.4%. Private investment rose 18.2%, with manufacturing up 40.1%; however, oil output fell 8.3%. Gold Reserves: The National Bank plans to cut gold’s share of reserves from about 78% to 75% by year-end, using physical sales and options as high US Treasury yields boost the appeal of dollar assets. Belgium Ties: During King Philippe’s visit, Kazakhstan highlighted more than $15 billion in Belgian investment since 2005 and proposed linking Aktau and Kuryk ports with Antwerp-Bruges to expand trade in metals, petrochemicals and farm goods. Economic Outlook: Annual inflation slowed to 9.3% over the first nine months, and the current account posted a $2.4 billion surplus in the first half. Connectivity: Kazakhstan and Kuwait discussed restoring direct flights to support tourism, business links and trade, subject to regional conditions.

Growth: Kazakhstan’s GDP grew 4.1% in the first half of 2026, with Ulytau leading regional growth at 15.3%. Trade and Infrastructure: Aktau Port’s 20.6 billion-tenge dredging project aims to lift cargo volumes by up to 30% and cut shipping costs by 10–15%, strengthening the Trans-Caspian route. Energy: Kazatomprom shareholders rejected a proposed uranium supply contract with Russia’s Uranium One while approving a deal with China’s state uranium company. Separately, ExxonMobil blocked a proposed settlement of Kazakhstan’s $5 billion Kashagan environmental fine; the dispute is tied to talks over a potential $80 billion field expansion. Investment: Kazakhstan and Belgium pledged to deepen cooperation in transport, critical minerals, energy and digital technology during the Belgian royal visit; Belgium has invested more than $15 billion in Kazakhstan since 2005. Digital Economy: Kazakhstan is seeking to move beyond data transit and raw-material exports by building local AI, data-processing and technology capacity.

Belgium Partnership: King Philippe’s state visit is putting business ties in focus. Kazakhstan says Belgian investment has topped $15 billion since 2005; talks covered critical minerals, transport, agriculture, healthcare and AI, with joint mineral-processing research among the proposals. Reserves: The National Bank plans to trim gold’s share of reserves from 78% to 75% by year-end, selling options and some physical bullion as rising US Treasury yields make dollar assets more attractive. Trade Routes: A new weekly Dubai–Almaty cargo service adds a direct link between two logistics hubs, while Kazakh grain exports to Europe face a Russian rail bottleneck. Customs officials from Turkic states also discussed digital transit systems and a 2027–31 cooperation plan to ease trade along the Middle Corridor.

Belgium Investment: President Kassym-Jomart Tokayev and King Philippe opened talks on expanding cooperation in transport, critical minerals, energy, agriculture and digitalization. Belgium has invested more than $15 billion in Kazakhstan since 2005. Digital Infrastructure: Yandex data-center strikes in Russia disrupted taxi, delivery and other services across Central Asia, highlighting reliance on computing infrastructure beyond Kazakhstan’s borders. Kazakhstan is pitching itself as a regional data-center hub, but power supply and customer demand remain key questions. Kashagan Dispute: ExxonMobil reportedly blocked a proposed settlement of Kazakhstan’s $5.2 billion environmental fine, complicating talks over the oil field’s future development. Caspian Energy: AIIB and Azerbaijan signed grants totaling $1.1 million to prepare a feasibility study for a proposed electricity cable linking Kazakhstan and Azerbaijan, with Uzbekistan also expected to connect. Regional Trade: Kazakhstan’s imports rose 5.5%, while consumer-goods purchases declined, according to a recent report.

Belgium Ties: King Philippe and Queen Mathilde’s first Central Asian state visit includes talks on critical minerals, AI and Middle Corridor links, plus the opening of a Kazakh-Belgian Business Council. Air Links: Air Astana will launch weekly flights from Almaty and Astana to Salalah on October 23 and 24, and plans a twice-weekly Almaty–Tokyo service from November 30, subject to approval. Gulf Investment: Kazakhstan and Oman agreed to create a $150 million fund for projects in industry, healthcare, renewables, food and logistics; OQ Exploration and Production also signed a cooperation deal with KazMunayGas. Digital Finance: Tether and Kazakhstan’s central bank are exploring a tenge stablecoin pilot and asset tokenization. Trade Routes: German logistics group Rhenus plans up to 14 terminals along the Middle Corridor, as Kazakhstan pushes to connect the route with the TRIPP initiative.

Digital Disruption: A drone strike shut down a Yandex data center in Russia, triggering taxi and delivery-service outages reported in Kazakhstan and other countries. Belgium Ties: King Philippe’s state visit brings business leaders to Astana and Almaty, with a new Kazakh-Belgian Business Council and talks on critical minerals, AI and transport. Oil Exports: Kazakhstan is weighing ways to reduce reliance on the Caspian Pipeline Consortium, which carries more than 80% of its crude, including expanded shipments across the Caspian toward Azerbaijan. Middle Corridor: Drone attacks on commercial ships off Bulgaria highlight security risks for the route linking China to Europe through Kazakhstan, the Caspian and the South Caucasus.

Manufacturing: China’s Li Auto plans to start building cars at Allur’s Kostanay plant in November, its first production site outside China. Initial output is expected to reach 10,000 vehicles a year, with plans to grow local sourcing. Belgium Ties: King Philippe and Queen Mathilde begin a state visit to Kazakhstan today with a 110-member delegation. Talks will focus on critical minerals, transport and AI, alongside a Kazakh-Belgian business council and a planned 2026–2029 cooperation roadmap. Regional Trade: At the Awaza summit, President Tokayev proposed lifting Central Asian trade from about $13 billion to $20 billion, backed by logistics hubs and industrial cooperation. He also highlighted the Middle and North-South corridors. Investment: Kazakhstan and Oman signed eight agreements during the Sultan’s visit, including plans for a $150 million investment fund and expanded energy and trade cooperation. Caspian Economy: Five coastal states agreed to set up a commission on the sea’s falling water levels, a threat to ports, shipping, fisheries and coastal economies.

New Economic Ties: Cambodian Prime Minister Hun Manet is due in Kazakhstan Oct. 12–17 with a delegation that includes business leaders, aiming to strengthen economic ties. Belgian Investment: King Philippe and Queen Mathilde visit Oct. 11–14 with executives and officials to discuss critical minerals, transport, agriculture and AI; the two countries are expected to sign a 2026–29 cooperation roadmap. Trade Routes: Türkiye opened a new EU-backed railway section near Bulgaria, adding freight capacity on the western end of the Middle Corridor linking Kazakhstan with Europe. Kazakhstan is also weighing North–South corridor upgrades to reach Iranian, Gulf and South Asian markets. Caspian Risks: Five coastal states agreed to establish a commission on falling sea levels, which threaten ports, shipping capacity and the region’s trade routes. Its first meeting is planned for Azerbaijan in the first half of 2027. Investor Watch: Kazakhstan’s government securities have been placed on JPMorgan’s watchlist for possible inclusion in its emerging-markets bond index.

Trade and Transit: Kazakhstan is pushing to integrate the Middle Corridor with the TRIPP route, while new analysis warns the country must build value-added services to earn more than transit fees. Investment: Kazakhstan and Greece have an eight-project portfolio worth $133.5 million; Chinese investors are also exploring copper deposits, and Astana is courting Italian firms for critical-mineral ventures. Business Climate: Halyk’s index points to expanding activity over the first nine months of 2026, though a separate measure showed a September decline. Experts expect a further 0.25–0.5-point base-rate cut, while the dollar rose to 449 tenge. Finance: Tether and Kazakhstan’s central bank are exploring a tenge stablecoin and asset tokenization; J.P. Morgan has placed Kazakhstan’s government securities on a watchlist for possible emerging-markets bond-index inclusion. Caspian Economy: Falling water levels threaten ports, fisheries and regional logistics, prompting Tokayev to call for shared monitoring and coordinated action.

CIS Industry: Tokayev proposed a 2027–30 portfolio of joint industrial and technology projects focused on higher-value goods. CIS countries account for more than a quarter of Kazakhstan’s foreign trade, which rose 10% in the first seven months of 2026. Middle Corridor: Kazakhstan is advancing the North–South route and Trans-Caspian corridor. Germany’s Rhenus plans up to 14 terminals from Uzbekistan through Kazakhstan and Azerbaijan to Türkiye, including a new multimodal hub in Aktau. Bond Market: J.P. Morgan has placed Kazakhstan’s government securities on a watchlist for possible emerging-markets bond index inclusion, beginning a review of market access and liquidity. Belgium Ties: King Philippe and Queen Mathilde visit Kazakhstan on Oct. 11–14 with a 110-member delegation, including business leaders. Talks are expected to cover critical minerals, logistics, agriculture and investment. Regional Growth: Turkic states recorded 5.86% combined GDP growth in the first half of 2026, compared with 1.51% globally; Kazakhstan grew 4.1%.

AI and Industry: Kazakhstan is pushing to use AI in manufacturing and across the economy, while a new government-employer-union declaration says workplace decisions affecting workers must remain subject to human review. Trade Routes: At the Central Asia-Azerbaijan summit, President Kassym-Jomart Tokayev proposed exploring links between the Middle Corridor and the TRIPP initiative; he said World Bank estimates point to a fourfold rise in Caspian freight by 2040 if planned infrastructure is completed. Digital Finance: Kazakhstan’s central bank and Tether will explore a tenge stablecoin and asset tokenization, a step toward expanding digital financial services. Investor Access: Kazakhstan’s government securities have joined J.P. Morgan’s watchlist for possible inclusion in its emerging-market bond index, potentially widening their reach among global investors. Oman Partnership: Kazakhstan and Oman signed investment and energy agreements and agreed to establish a $150 million fund, deepening trade and logistics ties.

Oman Investment: Kazakhstan and Oman signed eight agreements during Sultan Haitham’s visit, including energy and investment deals, and agreed to establish a $150 million fund. The partnership aims to expand trade and transport links. Market Access: J.P. Morgan placed Kazakhstan’s government bonds on its positive watchlist for potential inclusion in the GBI-EM. A 12-month review will assess investor access and bond liquidity; inclusion could attract more foreign capital and lower borrowing costs. Digital Finance: The National Bank, Tether and Alatau authorities will study a tenge-linked stablecoin and asset-tokenization pilots. No launch decision has been made. Economic Pulse: Kazakhstan’s business activity expanded over the third quarter, but the index weakened in September. Commercial lending grew in August even as corporate deposits fell.

AI Infrastructure: Kazakhstan has signed a strategic partnership to develop a “Digital Silk Road” linking data centers, satellites, space-based computing and the Trans-Caspian fiber-optic cable, with plans for industrial AI pilots. UK Trade: Tokayev said bilateral trade rose 83% in 2025 to more than $1.6 billion, with over 500 British companies operating in Kazakhstan; talks covered energy, transport and AI. Oman Investment: The two countries agreed on investment and energy cooperation, including a joint investment vehicle between Samruk-Kazyna and Oman’s sovereign wealth fund, and discussed using Omani ports for Kazakh exports. Digital Finance: Tether and Kazakhstan’s central bank will study a possible tenge-backed stablecoin and tokenized assets; no coin has been approved or launched. Markets and Prices: Kazakhstan’s stock market capitalization reached 50.2 trillion tenge, while September annual inflation eased to 9.3% and food inflation to 8.5%. Regional Trade: Kazakhstan-Afghanistan trade turnover reached $581.1 million in January-July, up 2.4-fold year on year.

Kazakhstan-Oman Deal: President Tokayev and Oman’s Sultan Haitham signed a package including a $150m joint investment fund and cooperation in oil & gas, transport, finance and logistics, aiming to deepen Gulf access for Kazakhstan. Oil Market Watch: OPEC+ kept November oil output targets unchanged despite Gulf supply risks tied to the Iran war; Kazakhstan is among the key members in the decision. Energy & Economy Outlook: The EBRD expects Central Asia growth to stay strong in 2026-27 but flags rising energy costs, water scarcity and tighter financing; Kazakhstan’s growth is estimated at 4.1% in H1 2026 with non-oil sectors still robust. Digital Connectivity: A new fibre-optic link is set to connect Kazakhstan and Azerbaijan via the Aktau–Sumgayit route, boosting the Middle Corridor’s role as a data and transport hub. Financial Sector Reform: Kazakhstan’s regulator is preparing microfinance sector reforms, while the tenge strengthened in September amid FX surplus. Corporate Moves: KT&G started full operations at a new Indonesia cigarette plant, expanding its global production network that includes Kazakhstan, and boosting export capacity. Aviation & Risk: Central Asia’s growing air cargo activity is raising insurance risk exposure for airlines and airports, with Kazakhstan and Uzbekistan seeing rising cargo volumes. Water Stress: Central Asia faces deeper water pressure as river flows decline and glaciers keep shrinking, threatening supplies across multiple countries.

Oman–Kazakhstan Deal Flow: Sultan Haitham bin Tarik’s state visit to Astana produced five agreements and 10 MoUs spanning investment, aviation, finance, tourism, energy and digital cooperation, including a Kazakhstan–Oman Business Council and a joint investment fund between Samruk Kazyna and Oman Investment Authority. Trade & Logistics Push: Kazakhstan is moving cross-border trade hubs from planning to implementation, with new logistics capacity emerging at gateways like Khorgos; separately, Middle Corridor upgrades get a boost as Rhenus Group plans 14 terminals along the route. Afghanistan Connectivity: Kazakhstan’s trade with Afghanistan is surging, and officials are again pushing rail links toward the Indian Ocean via Afghanistan and Pakistan. Grain Export Momentum: Kazakhstan railways set a September grain loading record and more Kazakh suppliers are joining a China-linked digital trade platform. Public Procurement Watch: Almaty plans to lease 352 locally assembled vehicles under an 8.1bn tenge deal. Digital Security Alert: NordVPN reports a surge in Roblox phishing services targeting logins and 2FA codes, including turnkey scam storefronts. Space & Monitoring: Kazakhstan plans six new Earth observation satellites to expand monitoring and potential export of satellite services.

Oman-Kazakhstan Deal Push: President Tokayev and Sultan Haitham bin Tariq held talks in Astana and oversaw the signing of five agreements and ten MoUs spanning investment protection, EDB cooperation, air transport, and an Oman-Kazakhstan business council, with cooperation also flagged for energy, transport, agriculture, health, IT and connectivity. Digital Finance & Smart Cities: Kazakhstan’s budget digitalization is credited with generating KZT 410bn in extra revenues, while Smart City rollout is moving toward a unified AI/data-driven model (aiming for 50% urban coverage by 2027 and 70% by 2028). Space & Telecom Revenues: KazSat satellites have generated 977bn tenge in economic impact over five years, with plans for KazSat-3R by 2029 and a broader satellite constellation by 2030. Regional Trade Boost: The UAE-EAEU Economic Partnership Agreement entered into force, granting preferential access across 86% of tariff lines and targeting near $50bn annual trade by 2032. Aviation & Logistics: Air Astana added Almaty–Tokyo direct service from late Nov 2026, strengthening trade and tourism links. Agriculture Shock: Buckwheat imports from Russia surged 18-fold in early 2026, raising pressure on domestic producers. Islamic Finance Interest: A Central Asia Islamic banking conference discussed how Kazakhstan can implement Islamic “windows” inside conventional banks.