Kazakhstan's Manufacturing Sector Outpaces Mining in Economic Transformation

Kazakhstan's economy is undergoing a significant structural shift, with the manufacturing industry now playing a more prominent role than the mining sector. This transformation aligns with strategic goals to reduce reliance on raw materials and develop more technologically advanced industries.

For the first time, the share of manufacturing in the country's GDP has surpassed that of mining. In 2024, manufacturing accounted for 11.9% of GDP, and this figure grew to 12.7% by the end of 2025. Overall production in the sector increased by 6.4% last year.

The growth was broad-based across key industries. Metallurgy saw a 1.2% increase, driven by higher output of ferroalloys (7.7%), pig iron (5.3%), steel (3.9%), rolled metal (6.4%), and pipes (3.2%). The engineering sector expanded by 12.9%, with notable rises in motor vehicle production (17.5%), agricultural machinery (18.1%), electrical equipment (16%), and computers and electronic equipment.

Chemical industry output grew by 9.8%, fueled by significant increases in polypropylene (65.5%) and ammonium phosphate (63.3%) production. The construction materials segment grew by 9.7%, while light industry posted an impressive 13.2% growth, exceeding its target, thanks to a 23.5% surge in textile manufacturing.

The government's industrial policy yielded tangible results in 2025 with the launch of 190 new projects worth a total of 1.5 trillion tenge, creating over 22,500 permanent jobs—including thousands in rural areas and single-industry towns.

These new facilities have also enabled domestic production of more than ten types of goods previously not manufactured in Kazakhstan, such as locomotive support beams, vehicle body panels, turbine blades for power plants, reverse osmosis membrane elements, glucometers, and Pure-Pak liquid cardboard packaging.

Investment activity remains strong: currently there are agreements worth over five trillion tenge under consideration at the Ministry of Industry and Construction for projects spanning metallurgy, engineering, chemicals, textiles and woodworking.

A key mechanism supporting this shift is a legally mandated system for 'ensuring domestic raw material supply.' It prioritizes supplying local processors with metals like copper aluminum zinc lead before allowing exports offering price discounts based on processing depth—up to LME minus five percent for finished goods

In practice this means companies like 'Kainar-AKB' can purchase lead from 'Kazzinc' at preferential rates to produce batteries for both domestic sale export Similarly metals from 'Kazakhmys' 'Kazakhstan Electrolysis Plant' feed into domestic electrical engineering production

Looking ahead plans for include implementing around projects valued at nearly trillion tenge expected create approximately thousand new jobs The focus will also be on launching production another ten new product types including heavy-duty dump trucks hydrogen sodium sulfate