Big-Picture Snapshot

Drivers This Month

Kazakhstan’s current account balance dropped to -2.80% of GDP in August 2025, marking a shift from the 0.67% surplus reported in May 2025[1]. This deficit is primarily driven by a 20% decline in oil export volumes amid softer global demand and production limits. Meanwhile, imports rose by 8%, bolstered by machinery and consumer goods purchases. The net impact was a swing of nearly 3.50 percentage points against the account balance relative to early 2025.

Policy Pulse

The National Bank of Kazakhstan has kept policy rates steady at 14%, consistent with the inflation target near 7%. The marginal current account deficit remains manageable, though it underscores pressure on foreign exchange reserves. The central bank’s cautious stance aims to balance growth with financial stability amid heightened external uncertainties.

Market Lens

The KZT currency depreciated 1.30% in the first hour post-release. Two-year sovereign yields rose 15 basis points, reflecting renewed risk premia. Breakeven inflation swaps held steady near 7.20%, signaling stable inflation expectations despite external shocks.

Foundational Indicators

Core Macroeconomic Indicators

GDP growth estimates for 2025 remain near 3.50% annually, down from 4.20% in 2024. Inflation holds steady at 6.80% YoY in July 2025, slightly below the 7% central bank target[2]. Unemployment rates dipped modestly to 4.50%, aligned with labor market improvements outside commodity sectors.

Monetary Policy & Financial Conditions

Monetary policy remains unchanged but accommodative to recent growth moderation. The liquidity measures and capital controls introduced in late 2024 continue to stabilize currency volatility. However, tighter global financial conditions may soon challenge this stance if external financing costs rise further.

Fiscal Policy & Government Budget

The government recorded a fiscal surplus of 1.20% of GDP in H1 2025, modestly improved from a 0.80% surplus in 2024. Spending restraint on subsidies and improved tax collection have reduced deficits, providing some buffer against external account pressures.

External Shocks & Geopolitical Risks

Persistent geopolitical tensions in the Eurasian region and volatile global commodity prices have dampened Kazakhstan’s export prospects. Sanctions on key trading partners and erratic energy demand from China—the main importer of Kazakhstan’s oil—remain critical downside risk factors.

Chart Dynamics

Current Account Balance Trends

The current account moved from an average surplus of 0.33% GDP in November 2024, through peaks in early 2025 (0.67%), into deficits by August (-2.80%)[3]. Comparatively, the last sizeable deficit this wide was recorded in February 2025 (-2.90%), underlining volatility linked to commodity cycles and trade imbalances.

Exchange Rate & Yield Patterns

The ten largest quarterly declines in the KZT exchange rate correlate with deficits exceeding 2.50% of GDP. Sovereign bond yields react asymmetrically, spiking only during simultaneous global tightening phases, as in Q1 2024. Current market dispersion suggests cautious sentiment but no systemic distress.

Trade Balance Components

Oil exports compose approximately 60% of all exports and contribute the largest swing factor. Non-oil exports remain flat, while imports of capital goods have risen 10% YoY, suggesting investment-driven demand despite external headwinds.

Forward Outlook

Bullish Scenario (30% Probability)

Global oil prices rebalance upward to $80+/barrel in 2026, restoring export earnings. Imports stabilize as domestic demand moderates. Fiscal policy continues surplus, and monetary stability fosters foreign investment inflows. The current account returns to modest surplus (0.50% GDP) by Q3 2026.

Base Scenario (50% Probability)

Modest recovery in commodity prices keeps exports subdued but steady. Imports remain elevated due to investment needs. External financing costs increase gradually. Current account deficits persist near -2% GDP through 2026, manageable but requiring policy vigilance.

Bearish Scenario (20% Probability)

Commodity prices drop below $60/barrel amid global slowdown. Heightened geopolitical tensions disrupt exports and capital flows. Currency depreciates sharply, inflation surges above 9%. Current account deficit widens to -4% GDP, exerting pressure on reserves and growth.

These probabilities integrate data from the Sigmanomics database and recent policy signals, reflecting balanced upside and downside risks.

Closing Thoughts

Kazakhstan’s August 2025 current account deficit marks a noteworthy shift, reflecting structural challenges and cyclical pressures. While monetary and fiscal policies have provided stability, external shocks—especially commodity volatilities and geopolitical risks—underline the fragility of the external sector. Enhancing export diversification and maintaining prudent fiscal buffers are vital for resilience.

The broader macro landscape suggests a cautious approach. Currency and bond markets exhibit mild stress signals, but no systemic threats currently. Policymakers and investors alike will closely monitor upcoming trade and production data alongside global economic developments.

For more context on Kazakhstan’s economic environment and policy evolution, consult recent Kazakhstan macro review 2025 and central bank policy 2025.

Insight Box: Current Account vs KZT/USD (2020–2025)

Since 2020, Kazakhstan’s current account balance and the KZT/USD exchange rate exhibit a strong positive correlation (r=0.68). Deficits tracked with depreciations, notably the -2.91% GDP deficit in November 2023 coincided with a 4.50% currency drop over two months. Conversely, surpluses above 0.30% GDP, as in mid-2025, aligned with temporary currency stabilization. Monitoring this relationship aids in predicting FX moves from external accounts.

FAQ

What is the Current Account for Kazakhstan as of August 2025?

The current account balance for Kazakhstan posted a deficit of -2.80% of GDP in August 2025, per the latest Sigmanomics database update.

How does Kazakhstan’s Current Account affect its economy?

The current account reflects trade and capital flows; large deficits may pressure currency, require external financing, and influence monetary policy decisions.

Why monitor Kazakhstan’s Current Account movements?

Tracking this indicator helps investors and policymakers gauge external stability, forecast FX moves, and assess vulnerability to global shocks.