Increased Foreign Direct Investment (FDI) in Kazakhstan; Alteration in the Composition of Investment Allocation
In the first quarter of 2025, Kazakhstan witnessed a remarkable surge in foreign direct investment (FDI), with inflows amounting to approximately USD 3.0 billion, marking an impressive 89.3% increase compared to the same period in 2024 [2]. This encouraging rebound follows a sharp decline in 2024, when gross FDI inflows dropped by 28% to USD 17.1 billion and net FDI turned negative for the first time since records began [1].
The sectoral distribution of FDI in Q1 2025 shows a growth in investment in fixed assets, particularly in infrastructure development, such as schools and hospitals [1]. This shift in focus suggests a move away from traditional oil and gas sector investments towards broader infrastructure and public service sectors.
The IT sector, too, has seen remarkable growth, with net FDI into IT growing sevenfold over the past decade, reaching $129.2 million in 2024. The country is aggressively pushing digital transformation with initiatives like the National AI Development Strategy, positively impacting agriculture, energy, and public administration [4].
The government is actively seeking to expand investment in the mining sector, particularly by attracting Canadian partners, highlighting the potential of untapped mineral resources valued at $40 trillion [1].
However, overall greenfield investment projects are down sharply in the region, with Kazakhstan part of a broader trend of cautious or reduced investor confidence in Central and Eastern Europe [3]. Yet, the sharp increase in FDI in 2025 suggests Kazakhstan may be an exception or in early stages of recovery.
The manufacturing industry experienced a growth of 27.6% in Q1 2025, while negative dynamics were observed in the transport sector. Construction saw a fall of 76.5%, and the information and communication sector surged by 9.5 times. The Netherlands increased its investments by $65.7 million (+4.6%) to $1.4 billion, and Switzerland boosted its inflow to $108.9 million (+74.7%) [5].
Investments from the United Arab Emirates marked a rise of $806.7 million, and Qatar jumped by $1.1 billion. However, negative dynamics were also seen in the trade, education, culture, and professional, scientific, and technical activities sectors in Q1 2025 [5]. The gross inflow of FDI in Q1 2025 was 6.2% higher than the same period last year ($6.2 billion), and the net inflow of FDI into Kazakhstan in Q1 2025 totaled $2.36 billion [5].
This pattern reflects Kazakhstan's evolving economic landscape, moving towards more diversified and tech-driven investment while recovering strongly from the 2024 downturn [1][2][4].
References: [1] Central Asia Monitor. (2025). Kazakhstan's FDI inflows rebound in Q1 2025. Retrieved from https://centralasiamonitor.org/kazakhstans-fdi-inflows-rebound-in-q1-2025 [2] Kazakh Invest. (2025). FDI inflows to Kazakhstan amount to USD 3.0 billion in Q1 2025. Retrieved from https://kazakhinvest.gov.kz/en/news/fdi-inflows-to-kazakhstan-amount-to-usd-3-0-billion-in-q1-2025 [3] EBRD. (2025). FDI in Central and Eastern Europe: Trends and challenges. Retrieved from https://www.ebrd.com/news/2025/fdi-in-central-and-eastern-europe-trends-and-challenges [4] Ministry of Digital Development, Innovation and Aerospace Industry of the Republic of Kazakhstan. (2025). National AI Development Strategy. Retrieved from https://adis.gov.kz/en/strategy/national-ai-development-strategy [5] National Statistics Committee of the Republic of Kazakhstan. (2025). FDI inflows to Kazakhstan in Q1 2025. Retrieved from https://stat.gov.kz/en/publications/fdi-inflows-to-kazakhstan-in-q1-2025
Investors are increasingly focusing on Kazakhstan's infrastructure development and public service sectors, with a growth in investment in fixed assets observed in Q1 2025 [1]. The IT sector has seen significant growth over the past decade, experiencing a net FDI increase of sevenfold [4].
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