We live in an era where every day is unpredictable, like a new chapter in a book. Geopolitics has lost its rational form and turned into a high-stakes game where stability, trust and security are at risk. Globalisation once promised humanity an era of mutual understanding and cooperation. But today’s geopolitics has transformed globalisation into a source of vulnerability.
Growing turbulence is evident not only in politics but also in the perception of the world. The global uncertainty index is breaking records, reflecting a shift in moods and expectations. IMF Managing Director Kristalina Georgieva aptly noted: “uncertainty has become the new normal”. In such an environment, information becomes a strategic resource: news, statements and even hints from leaders are increasingly acting as economic decision-making factors, influencing the behaviour of investors, consumers, and governments (see Details. From Words to Data: Measuring the “Power of Words”).
The confrontation between the two giants – the U.S. and China – has gone far beyond trade. It is no longer just a dispute over trade barriers, but a struggle for technological and ideological leadership. With Donald Trump’s return to the White House, Washington’s rhetoric towards Beijing has intensified. The average U.S. tariff on Chinese exports is approaching 60%, and starting November 1, 2025, the U.S. announced an additional 100% tariff on top of the current ones – in response to China’s new export restrictions on rare earth metals and magnets. This race is undermining global supply chains, exacerbating imbalances and posing the threat of a new round of inflation.
But despite rising conflicts, the global economy shows remarkable resilience. The U.S. tariff policy has not yet dealt a fatal blow to international trade, as countries have begun to find compromises. In its October WEO, the IMF improved its global growth forecast for 2025 to 3.2% (previously 3.0%), noting countries’ ability to adapt to growing uncertainty. However, the IMF warns of risks that could push the 2026 forecast downwards: prolonged uncertainty, rising protectionism, and labour supply shocks could lead to lower economic growth.
In commodity markets, energy prices have been declining for six months, while food and non-ferrous metals show an upward trend. There is an oversupply on the global oil market, but OPEC+ countries, seemingly oblivious to this, continue to expand production quotas. A reduction in output by one member is almost immediately offset by another, making the consensus increasingly formal. Medium-term oil price forecasts remain unfavourable for net oil exporters.
Against this backdrop, Kazakhstan demonstrates impressive economic growth of 6.3% (YoY) for January-September 2025. International financial institutions, encouraged by this positive data, have revised Kazakhstan’s growth prospects for the current year upwards to a more optimistic outlook. However, the economy is driven mainly by construction, transport, and trade, with double-digit growth concentrated in non-tradable sectors. At the same time, the extractive sector faces pressure from falling oil prices, though still showing strong growth, while metallurgical production displays signs of stagnation.
High growth in fixed capital investment is mainly supported by fiscal stimulus, which makes it unsustainable. The poor global oil market is already affecting the country’s external economic and fiscal balances. Kazakhstan is once again facing a “twin deficit”. The further the trade conditions deteriorate, the greater the risks to macroeconomic stability.
Inflation is accelerating, reflecting the combined impact of weaker KZT, rising utility tariffs, the removal of fuel price caps, and imported pressure. Real household incomes are growing slowly, and the “trickle-down” effect of fiscal stimulus remains weak.
Since actual inflation dynamics left no room for manoeuvre, AERC revised its average annual inflation forecast for 2025 from 11.0% up to 11.5%. There is hope that the government’s freeze on pro-inflationary initiatives until the end of Q1 2026 will lead to a decline in inflation, as a result of which AERC forecasts average annual inflation for 2026 at 8.6%.
Considering the government’s positive assessments and the actual data for the first nine months of 2025, AERC has improved its GDP growth forecast for 2025: from 5.0% to 5.8% – according to the aggregate supply model, and from 4.9% to 5.6% – according to the aggregate demand model. For 2026, the consensus forecast for economic growth based on the two models is 4.3%, reflecting the worsening terms of trade (see Details. Beyond the Forecast: AERC’s View of 2026 vs. the IMF).
The general government budget deficit forecast has been slightly improved to (-)2.4% of GDP versus (-)2.5% in the July report, and the forecast for 2026 has been extended to (-)3.2% of GDP. The current account deficit has improved significantly to (-)3.6% of GDP from (-)7.2% in the previous review. For 2026, the current account balance is projected at (-)3.5% of GDP.
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