By mid-2026, the global economy had largely adapted to the new geopolitical landscape. Despite ongoing conflicts and persistent tensions between Iran and the United States, the response of global financial and commodity markets became more restrained. Market participants increasingly focused not on political statements themselves, but on their potential implications for energy supplies, global trade, and economic growth. Following the spring escalation in the Middle East and the subsequent stabilization of shipping through the Strait of Hormuz, part of the geopolitical risk premium had already been reflected in Brent crude prices, although the risks of renewed supply disruptions and increased volatility remained. As the situation evolved, market participants appeared to have developed a clearer understanding of the underlying logic of the Trump administration’s policies. Despite the high unpredictability of individual decisions, its key priorities remained relatively consistent: supporting U.S. industry, protecting the domestic market, using trade instruments to strengthen the U.S. negotiating position and prioritizing national interests.
In its July World Economic Outlook, the IMF noted that the global economy remained resilient despite geopolitical risks. The Fund lowered its global growth forecast for 2026 by 0.1 p.p. to 3.0%, while revising its 2027 forecast upward to 3.4%. According to the IMF, net energy exporters not directly involved in the conflict benefited from improved terms of trade. At the same time, countries at the forefront of artificial intelligence development demonstrated stronger economic activity even without the advantages associated with energy exports. The World Bank also downgraded its 2026 growth forecast to 2.5% (previous – 2.6%), attributing the revision to the consequences of the conflict in the Middle East and the persistent risk of disruptions to energy supplies.
Global commodity market dynamics remained highly uneven in 2026. Developments in the Middle East and risks to supplies through the Strait of Hormuz were the main factors shaping markets in the first half of the year. However, as transportation flows normalized, many commodity markets returned to being driven by fundamental supply and demand factors. At the same time, prices for food, fertilizers, and most industrial metals declined.
During the current year, despite ongoing inflationary pressure, Kazakhstan’s economy demonstrated a growing contribution from the non-tradable sector and non-resource industries. According to the Government of Kazakhstan, GDP grew by 4.1% in the first half of 2026, driven primarily by construction, transport and warehousing, manufacturing and trade. Annual inflation declined to 10.3% in June, while two consecutive rate cuts by the National Bank – in June and July – brought the base rate down from 18.0% to 16.75%.
Amid global uncertainty, Kazakhstan continued to implement political reforms under the “Just Kazakhstan” concept. Among the most significant developments in recent years were constitutional amendments affecting the structure of government institutions and certain mechanisms of political governance. Although these transformations were primarily political and legal in nature, their potential impact on the country’s investment climate and economic development would depend on the effectiveness of their practical implementation. The outcomes of these changes could be objectively assessed only over the medium to long term (see below: “The Constitution and the Economy: Is Changing the Rules Enough?”).
AERC raised its economic growth forecast for 2026 from 4.6% in April to 4.8%. The revision was based on the results of aggregate demand and aggregate supply models. On the supply side, the improved outlook reflected stronger performance in transportation, construction, and manufacturing. On the demand side, growth would be supported by household consumption and gross fixed capital formation.
Expanding aggregate demand, the continued liberalization of fuel prices, and reforms in the housing and utilities sector will exert upward pressure on domestic prices. Taking these factors into account, AERC raised its average annual inflation forecast for 2026 from 9.0% to 10.4%. The current account deficit forecast was revised from (-)3.7% to (-)4.4% of GDP. Partial fiscal consolidation on the revenue side, primarily through tax reform, was expected to offset the increase in expenditures. Consequently, the general government budget deficit forecast was improved from (-)3.5% to (-)2.3% of GDP.
