Kazakhstan is forced to invest more of its own funds in infrastructure, industrial enterprises, housing and other facilities – everything that falls under the definition of fixed assets. About why the contribution of foreign investors is becoming more modest and what this means – in the review of Kursiv Research. This was reported by Qazaqyia.kz citing Kursiv Media.
Investments in fixed capital (IFC) are investments of funds for the purpose of obtaining an economic, social or environmental result. IFC includes both the construction of new roads, factories and residential buildings, and the reconstruction of existing facilities. Statistics classify as investments in fixed capital the purchase of machinery and equipment, payment for software subscriptions, costs for acquiring a main herd and forming perennial plantations.
According to calculations by the Bureau of National Statistics of the Agency for Strategic Planning and Reforms of the Republic of Kazakhstan, for the full year 2025 (data published on 03.07.2026), the share of investments in fixed capital from domestic sources reached a maximum in the last 10 years – 85.5%. This is a peak value for the decade, and it is quite possible that it is a historical maximum.
For the first time, the Kazakh statistical agency identified "domestic" and "external" investments in a report for 2010. Methodological explanations indicated that domestic investments refer to IFC created by residents, and external investments refer to capital investments of foreign investors.
At the end of 2010, the share of domestic funds in the IFC structure was just over 60%. Subsequently, the indicator mainly grew. The most active growth occurred in the period from 2019 to 2025, when the share of domestic investments increased from 67.2% to the aforementioned 85.5%.
During this period, in absolute terms, the total volume of investments in fixed capital increased from 12.6 to 23.5 trillion tenge (1.9 times), domestic investments – from 8.4 to 20.1 trillion (2.4 times). The contribution of foreign investors decreased not only structurally, but also in nominal terms: from 4.1 to 3.4 trillion tenge (-17%).
The decline in the structural share of external investments is the result of a combination of two factors: the completion of the infrastructure renewal cycle and the transition of oil megaprojects to the production phase.
The first and main factor is the completion of large investment projects in the oil and gas complex. These projects were financed mainly by foreign investors – Chevron, Exxon, Eni and other multinational companies. The rise and consistently high rates of gross inflow of foreign direct investment, which later transformed into production complexes in western Kazakhstan, were a fortunate coincidence for our country.
The launch of Kashagan – a project with a first phase cost of more than $50 billion – was originally planned for 2011, the official launch took place in 2013, but at the end of that year it had to be suspended due to technical problems, additional funds were invested to eliminate them, and it was relaunched in 2016.
The second oil megaproject – the Future Growth Project at Tengiz (FGP/WPMP) – was initially estimated at $37 billion in 2013, but investors postponed it several times, first due to unfavorable oil prices, then some time was needed to agree on project parameters with the Kazakh government. The project was officially launched in 2016, completion was planned for 2022, but the official and full launch of FGP/WPMP occurred in April 2024: by that time, the total investment in the project was estimated at $49 billion.
The completion of two megaprojects led to a reduction in IFC in the oil and gas sector: according to the BNS, in 2023 the volume of capital investments in oil and gas amounted to 3.3 trillion tenge, in 2024 – 2.2 trillion, and in 2025 – 1.8 trillion. As a result, in the IFC structure, the share of the mining industry, represented mainly by oil workers' investments, decreased over five years (2020–2025) from 32% to 14%.
At the same time, capital expenditures of the state grew, which in the last five years significantly expanded financing of infrastructure projects. Under the Nurly Zhol program for 2020–2025, 5.6 trillion tenge was allocated, and in 2023–2025, the Comfortable School project was implemented with a total cost of 1.5 trillion. Since 2025, the national project "Modernization of the Energy and Utility Sectors" (MEUS) has been implemented, designed until 2029 with total financing of 13.6 trillion tenge (mainly from extra-budgetary funds).
State and government-supported financing ensured a structural increase in the share of public sectors (public administration, education, healthcare) in the structure of investments in fixed capital from 16% in 2020 to 27% in 2025. In the same period, the share of sectors included in MEUS increased from 10% to 14%. In addition, investments in development, indirectly supported by the state through the housing construction savings system, grew.
The overlap of cycles may mask deep problems of the national economy, which the government is trying to quickly solve by switching the economy from direct external feeding to indirect – through funds borrowed by development institutions and state-owned companies on external markets for subsequent investment within the country.
Why does this risk really exist? We see sectors where the increase in investment inflow is largely provided by internal resources. The largest example is the share of manufacturing in the overall IFC structure in 2020–2025 increased from 9% to 13%. In the structure of foreign direct investment, this sector looks more modest: the share of liabilities to non-residents (net position) increased only from 5.2% to 7.6%.
The situation requires deeper study, but the general conclusion is this: if foreign investors do not enter a rapidly growing sector of the economy where their participation is not limited (and in the case of manufacturing in Kazakhstan, even encouraged), this – as an economics professor would say – may indicate the presence of deep institutional distortions and high specific risks that offset the expected market premium.
In other words, the record level of domestic investment is a good reason to once again dig into how institutionally sound we are.