Kazakhstan’s Economy Slows but Remains in Growth Territory: June Business Activity Data, DKnews.kz reports.
Kazakhstan’s economy continued to expand in June, albeit at a slower pace. The country’s composite Business Activity Index (BAI) edged down to 50.6, compared to 51.4 in May. Despite the decline, the index remains above the critical 50-point mark that separates growth from contraction, according to the latest data from the National Bank of Kazakhstan.
What’s going on?
Rustem Orazalin, Director of the National Bank’s Monetary Policy Department, noted that while growth has slowed across several sectors, economic activity overall remains in positive territory. Manufacturing (51.7), services (51.2), and trade (51.4) all posted readings above 50 in June, although each showed a slight pullback from May (which posted 53.5, 51.1, and 52.4, respectively).
Where’s the weakness?
The steepest decline was observed in the construction sector, where the index fell to 44.7, down sharply from 49.6 in May. Mining also remained in contraction, with a modest drop from 48.9 to 48.1.
What are businesses saying?
Alongside the BAI, the National Bank also tracks the Business Climate Index (BCI) — a forward-looking indicator based on entrepreneurs’ views of current and future conditions. In June, the BCI dropped to 11.6, reflecting reduced confidence in both current operations and business outlooks.
“According to surveyed enterprises, demand for goods and services is continuing to grow, but at a slower rate. The services sector saw a slight decline in demand, while manufacturing remains the strongest,” the National Bank reported.
So, while business sentiment has cooled slightly, the broader economic cycle is still pointing upward — just not as strongly as earlier in the year.
Why does it matter?
The BAI is a key real-time indicator of economic health. A reading above 50 signals expansion, while anything below indicates contraction. It’s based on monthly surveys of companies across core industries and helps gauge business confidence.
The BCI, on the other hand, captures business sentiment — how companies perceive today’s environment and what they expect in the near future. Though subjective, it often predicts shifts in investment and hiring patterns.
What’s next?
The slowdown is in line with global trends, as economies adjust to shifting supply chains and post-pandemic realignments. The National Bank is expected to maintain a cautious monetary stance, watching inflation risks and domestic demand closely.
One sector to watch is construction — a bellwether of investment and economic momentum. A prolonged downturn there could affect broader business sentiment and spending.
Kazakhstan’s economy is still growing — just more slowly. That may not make headlines, but in a global environment full of uncertainty, slow and steady growth is a strength. For now, the foundation remains solid.
