The International Monetary Fund (IMF) expects Kazakhstan's economy to expand by 4.9% in 2027, a step up from the 4.4% projected for this year, according to its latest World Economic Outlook released in October. The 2026 forecast represents a slowdown from the 6.5% growth recorded in 2025, but still places Kazakhstan ahead of other oil-exporting nations in the IMF's Middle East and Central Asia grouping.
The regional economy is projected to contract by 0.3% in 2026 before rebounding to 6.3% growth in 2027. The closure of the Strait of Hormuz has hit Middle Eastern oil exporters particularly hard, with Bahrain, Iraq, Kuwait and Qatar expected to see double-digit contractions this year, followed by a recovery in 2027 as production and exports normalise.
Geopolitical tensions and oil markets
The IMF identifies geopolitics and technology as the two dominant forces shaping the global outlook. The US-Iran conflict has disrupted energy markets, with the Strait of Hormuz closed since March, cutting off roughly 20% of the world's oil supply—about 20 million barrels per day. In response, producers outside the Persian Gulf, including Brazil, Kazakhstan, the United States and Venezuela, have increased output to compensate. Some Gulf states have redirected supplies via alternative routes, while the International Energy Agency (IEA) and China have released emergency reserves.
The IMF's baseline scenario assumes the strait will reopen in March 2027, with a broader return to pre-war conditions by October of that year. Russia's war in Ukraine continues to add to supply disruptions, as Ukrainian strikes on Russian energy infrastructure have affected shipments of Kazakh crude through the Caspian Pipeline Consortium (CPC).
AI investment as a potential opportunity
Despite the negative impact of geopolitical shocks, investment in artificial intelligence (AI) and related technologies has provided some support to economic activity. The IMF points to growing demand for advanced hardware, including semiconductors, as a potential opportunity for commodity-exporting economies like Kazakhstan. These countries sit earlier in the global supply chain, supplying raw materials for technology components largely manufactured in economies such as South Korea and Taiwan.
However, the fund cautions that the sustainability of the AI-driven investment boom remains uncertain. Demand for technology could prove more persistent than expected, but energy constraints and safety concerns could limit the industry's ability to expand. For a broader perspective on AI's staying power, see this analysis of investor sentiment.
Regional outlook: Caucasus and Central Asia
The IMF notes that commodity prices, remittances and ongoing reforms will continue to support growth in the Caucasus and Central Asia. Uzbekistan's economy is forecast to grow by 7.8% in 2026, before slowing to 6.5% in 2027. Kyrgyzstan is projected to record growth of 9% this year and 7% next year, while Tajikistan's economy is expected to expand by 7.3% and 6.8%, respectively. Turkmenistan is forecast to see growth of 2.4% in 2026, edging up to 2.5% in 2027.
Kazakhstan's position as a key energy supplier to Europe has drawn attention, particularly as the EU seeks to diversify away from Russian hydrocarbons. The country's ambitions to become a regional tech hub have also been highlighted, with Nvidia's Jensen Huang recently describing Kazakhstan as a potential AI hub for Europe. Meanwhile, President Kassym-Jomart Tokayev has been pushing for rapid construction of nuclear plants to meet growing domestic energy demand, a move that could further stabilise the economy.
Global growth and inflation
The IMF describes the global economy as resilient but increasingly uneven in its ability to withstand external shocks. Global growth is projected to slow from 3.5% in 2025 to 3.1% in 2026, before recovering to 3.4% in 2027. Among major economies, US GDP growth is expected to remain at 2.3% in both 2026 and 2027. The eurozone is forecast to see growth slow to 1.1% this year and pick up to 1.2% next year, while China's growth is projected to ease to 4.5% in 2026 and 4% in 2027.
Global inflation is expected to come under renewed pressure from war-related supply disruptions. After declining to 4.1% in 2025, headline inflation is forecast to rise to 4.7% in 2026 before returning to 4.1% in 2027. For Europe, the energy price shock has already translated into higher import costs, with the EU's monthly oil import bill surging by €10 billion amid Middle East tensions, a trend that could persist if the strait remains closed.
