AGP Executive Report

AI & Digital Skills: Kazakhstan’s “AI Leaders 2026” graduation in Astana brought 800+ executives from 150+ orgs across nine countries, with 45+ hours of training and 120 hours of mentoring, backed by the Ministry of AI and Digital Development and partners including Stanford HAI and OpenAI Academy. Agribusiness Exports: Kazakhstan and Hong Kong partners signed a memorandum to push soybeans and processed soy products into Asia, with support on market demand, logistics channels, and export readiness. Food & Dairy Output: North Kazakhstan reported 118 operating dairy farms and rising production, including 382,000 tons of milk and 631 million eggs in 2025. Transport & Middle Corridor: Kazakhstan is tied to Middle Corridor expansion as TITR/The Trans-Caspian route work continues to move oil and goods across the Caspian and beyond. Macroeconomy: The National Bank trimmed the base rate to 17% and kept 2027 inflation guidance, citing slowing inflation and a stronger exchange rate. Nuclear Cooperation: Kazakhstan’s Atomic Energy Agency signed an SPIEF memorandum with Russia’s Kurchatov Institute on fusion research, reactor tech, nuclear medicine, and digitalization. Caspian Risk: UNEP warns the Caspian Sea could shallow sharply over 50 years, threatening ports, shipping, fishing, and biodiversity. Urban Development: Astana’s budget plan lifts spending to 111.4bn tenge, with higher allocations for transport, utilities, and greening.

Kazakhstan–Hong Kong Trade & Agriculture: Kazakhstan signed a partnership with Hong Kong’s Soy Sky Farmtech to boost exports of grain, oilseeds, legumes and wheat flour, with Hong Kong acting as a gateway into China and Asia-Pacific; the deal also covers market intelligence, logistics links, forward-contract financing and potential soybean seed supply to Kazakh farmers. Transport & Logistics: Kazakhstan’s Middle Corridor keeps gaining momentum as container traffic on the route more than doubled in May, while Baku–Tbilisi–Kars upgrades are set to strengthen transit volumes. Water & Industry Compliance: Kazakhstan reported sending 6.16bn cubic meters of water to the Caspian Sea since the start of 2026, alongside progress on the new Water Code requiring industrial enterprises to plan recycled-water transitions and modernize systems. Business Diplomacy: A Kazakhstan–Cyprus business forum in Astana focused on trade, logistics, agriculture, IT/AI, fintech and investment, with Freedom Holding Corp. backing the event. Energy & Regional Context: Commentary around Hormuz blockade risks highlights how Kazakhstan and other producers are adjusting output as global shipping routes face higher costs and uncertainty.

Cement Quality Push: Kazakhstan’s Ministry of Transport is running a nationwide assessment of domestically produced cement to set a new “Road Cement” standard, aiming to boost frost resistance and durability for highways. Middle Corridor Momentum: The Baku–Tbilisi–Kars railway has moved to full-scale operation, strengthening overland freight flows that feed Kazakhstan’s Trans-Caspian transit role. Water Management: Kazakhstan has sent 6.16bn cubic meters of water to the Caspian Sea since the start of 2026, while the new Water Code drives industrial enterprises to plan recycled water and modernization. AI Adoption: OpenAI says Kazakhstan leads Central Asia in ChatGPT adoption, with government-backed efforts pushing AI skills into education and business. Kazakhstan–Cyprus Business Ties: A Kazakhstan–Cyprus forum in Astana, backed by Freedom Holding Corp., focused on logistics, agriculture, IT/AI, fintech, and investment cooperation. Regional Energy Context: Commentary on the Strait of Hormuz closure highlights how markets are rerouting supply and how higher insurance and logistics costs could keep energy prices elevated.

Education Buildout: Kazakhstan plans to commission 96 new schools by year-end, on top of 1,200+ schools built since 2020, while renovating 1,300 schools over three years to cut three-shift schooling. Industrial & Logistics Push: First Deputy PM Nalibayev toured the KIA Qazaqstan auto plant (up to 70,000 vehicles/year) and reviewed Kostanay’s Tobyl transport-logistics complex (64bn tenge), targeting higher container traffic and 500 jobs by 2027. AI for Classrooms: Kazakhstan leads Central Asia in generative AI use, with OpenAI talks on “ChatGPT Edu” and expanded AI training for teachers and students. Transport Materials Research: KazdorNII is studying domestically produced cement for road construction to set unified “Road Cement” requirements suited to local climate. Business Climate Update: The National Bank reports May business activity rising to 51.6, with gains in construction, manufacturing, and services. Middle Corridor Link: Tokayev invited Cyprus into the Trans-Caspian International Transport Route to connect Kazakhstan’s land logistics with Cyprus’s maritime hub. Energy Infrastructure Outlook: Kazakhstan’s first nuclear plant is set to cover about 20% of current electricity demand, with construction work starting in 2027. Trade & Finance Ties: Kazakhstan and Hong Kong discussed expanding trade, gold market infrastructure, and financial services, aiming to grow agricultural and light/food exports.

Middle Corridor Push: Kazakhstan is inviting Cyprus into the Trans-Caspian International Transport Route, with talks highlighting faster China–Europe transit via Kazakhstan, the Caspian, the South Caucasus and Turkey. EU–Kazakhstan Logistics: The EU and Kazakhstan reaffirmed plans to expand the Trans-Caspian route, backing upgrades like Aktau port modernization, Beyneu–Sekseul highway works and digital cross-border procedures. Baku–Tbilisi–Kars Boost: BTK moved to full commercial operation, targeting higher freight capacity and strengthening Kazakhstan’s transit role. Kazakhstan–Cyprus Business: A Kazakhstan-Cyprus forum in Astana focused on logistics, agriculture, IT/AI, fintech, renewable energy and structured investment, with Freedom Holding Corp. as strategic partner. Digital Economy Pressure: A financial analyst says Kazakhstan’s state data centers are priced beyond many businesses, pushing firms toward overseas cloud. AI & Energy Demand: An interview warns AI infrastructure buildout is draining mining and power resources, even if it’s sold as deflationary later. Food Security Health: FAO flagged antimicrobial resistance as a growing threat to livestock and food security. One Health in Central Asia: Kazakhstan joined a World Bank-led regional review of One Health progress under the Pandemic Fund, aiming to scale sustainable health, veterinary and environmental actions. Weather Risk: WMO warns El Niño could bring unusually heavy summer rains to Central Asia.

Services & Jobs: Kazakhstan’s services PMI stayed in expansion in May (Business Activity 52.7), with new orders and confidence rising, but employment kept falling for a fourth month as firms cut staff. Urban Transit: Astana launched Central Asia’s first urban light rail, a 22.4 km driverless line with 18 elevated stations, cutting end-to-end travel to about 28 minutes. Robotics & STEM: Kazakh school teams won major FIRST Tech Challenge awards in the US, including an Inspire Award for PHOBOS and another Inspire win for NIS Shymkent’s Atomic Heart. Construction Tenders: Integra Construction KZ and BI Group-linked Alem Qurylys AQ are bidding for a T84.3bn state contract for engineering networks and transport infrastructure in Atyrau’s special economic zone. Aviation & Tourism Links: Air Astana added Astana–Guangzhou flights, while Hong Kong plans direct Almaty service that could save business travellers up to 10 hours and boost tourism. Trade & Logistics: Kazmortransflot set a May record on the TITR Aktau–Alat line (7,451 TEUs). AI Adoption: OpenAI says Kazakhstan leads Central Asia in ChatGPT use, and talks in Astana focused on expanding AI education tools. US Forced-Labour Tariffs: The US proposed Section 301 tariffs on 60 economies including Kazakhstan over forced-labour enforcement gaps. Economy Outlook: EBRD forecasts Kazakhstan GDP growth of 4.7% in 2026, citing oil-sector disruptions but continued momentum in construction, transport and manufacturing.

Macroeconomy Outlook: The EBRD projects Kazakhstan’s real GDP growth at 4.7% for 2026, after slower 1Q momentum tied to oil-sector disruptions; construction, transport and manufacturing held up, while mining contracted and is expected to recover later in the year. Water & Agri-Tech: Kazakhstan is working with the U.S. Bureau of Reclamation to cut agricultural water use, focusing on digital metering, telemetry and reducing canal losses. Eurasian Logistics: Kazakhstan joined the upgraded Baku–Tbilisi–Kars railway launch; annual freight capacity is set to rise to 5 million tons, boosting the Middle Corridor. Transport & Trade Corridors: The 2nd Caspian Transport, Transit and Logistics Forum opened in Baku with a push for digitalization across supply chains. AI Adoption: OpenAI says Kazakhstan ranks high in practical ChatGPT use, and officials discussed AI education and skills-building. Energy Supply: Kazakhstan reported a power surplus of about 300 million kWh in Jan–May, with plans to commission new gas and renewable capacity. Agriculture Drones: Turkistan launched a UAV production facility for crop-spraying drones, targeting up to 500 units per year. Bilateral Business Push (Cyprus & Hong Kong): Cyprus and Kazakhstan signed new cooperation MoUs across digital governance, education, culture, sports and investment, while Hong Kong’s John Lee’s visit produced 42 agreements with Kazakhstan spanning aviation, finance, tech and green development. Regional Minerals Strategy: Central Asia is moving to turn critical minerals into supply-chain leverage as global demand rises and geopolitics reshapes processing and sourcing.

Alatau City Push: President Tokayev told the government to speed up Alatau’s “city of accelerated development” plan, backed by a new special legal regime, tax preferences, and simpler rules to attract investment and innovation. China Financing Watch: Kazakhstan is ramping up borrowing from China, including a debut 3.4bn yuan “panda bond” sale, as Astana’s PRC debt climbs and future funding for digital transformation is expected. Mining & Metals Modernization: Kazakhstan is investing over 530bn tenge to modernize mining and metallurgical firms, with a monitoring map to track upgrades and safety improvements. Tech & Skills Transfer: The Luban Workshop in Astana is training students on AI-driven industrial automation using robotic and drone equipment, with more workshops planned. Agriculture Update: Kazakhstan’s meat output rose 3.4% in Jan–Apr, while lamb prices spiked in April–May mainly due to Kurban Ait seasonality, not shortages. Trade & Logistics: Kazakhstan and China agreed to set up a joint grain-trading platform, aiming to boost oilseed trade and reduce disruption risk. Aviation & Business Links: Hong Kong Chief Executive John Lee led a major delegation to Kazakhstan and Uzbekistan, with Cathay Pacific restarting Almaty flights in 2027. Nuclear Cooperation: Kazakhstan and the Joint Institute for Nuclear Research reaffirmed plans for joint projects and training as cooperation expands.

EU Sanctions: The EU is preparing its 21st Russia sanctions package, with a focus on oil revenues and tightening pressure on evasion networks. Tech Ecosystems: Kazakhstan has entered the global top 10 fastest-rising tech ecosystems, with Almaty and Astana Hub highlighted for scaling startups and attracting investment. Capital Markets: Kazakhstan launched its debut RMB “panda bond” sale, raising 3.4bn yuan at a record 1.9% yield on the Astana International Exchange. Mining & Metals Modernization: Kazakhstan is investing over 530bn tenge to upgrade priority mining and metallurgical enterprises, including more digital safety controls. Energy Transition: Kazakhstan targets 8.4 GW of renewable capacity by 2035 while keeping its role as an energy and transit hub. Manufacturing Pulse: PMI data shows tentative stabilization in manufacturing in April, though conditions remain in contraction. Industrial Safety: A Kazzinc blast that killed three workers is preliminarily linked to violations of technological procedures. Agri-Trade: Kazakhstan’s agricultural exports to Iran nearly doubled in 2025, driven by grain shipments. Renewables & Power Links: Kazakhstan, Azerbaijan and Uzbekistan discussed grid integration and new tech, including battery storage experience. Bilateral Finance & Logistics: Kazakhstan and Hong Kong signed new investment and media cooperation deals, while Cathay plans direct flights to Almaty in 2027. Infrastructure & Growth: Tokayev reviewed Alatau City progress, including major investment projects and plans to build core infrastructure.

Energy Diplomacy: Kazakhstan’s energy minister met Turkey’s counterpart in Baku to discuss expanding oil & gas, power, renewables, and joint projects, with special focus on the Trans-Caspian transport route. Manufacturing Pulse: S&P Global PMI shows Kazakhstan’s manufacturing stayed in contraction in May (PMI 49.0), with weaker demand, output declines, and job cuts, while inflation pressures eased slightly. Oil & Logistics Risk: Oil jumped on renewed Iran–US tensions and Hormuz blockade fears, while Kazakhstan ordered Kashagan’s second-largest oilfield to postpone its turnaround to 2027, affecting contractors. Aviation Fuel Supply: Russia banned aviation fuel exports until Nov 30, a move that could ripple to Central Asia, including Kazakhstan. Trade & Connectivity: Hong Kong will relaunch direct flights to Almaty in Q1 2027 and explore a double-tax deal; Kazakhstan and Russia also launched a pilot driverless freight route. Industrial Expansion: Pavlodar’s $15bn industrial park push with Xinfa Group moves forward, and Kazakhstan plans to produce gas, diesel and coke from coal. Agriculture: Turkistan’s melon and watermelon harvest is underway, with exports to Russia already moving.

Nuclear & Power Diplomacy: Kazakhstan and Japan reaffirmed cooperation on peaceful nuclear use, training and advanced nuclear tech, building on a partnership since 2002. EAEU Digital Policy: EAEU leaders in Astana adopted a joint statement on responsible AI development, aiming to speed up data processing and boost integration across industry, logistics and agriculture. Logistics Automation: Kazakhstan and Russia launched a pilot driverless freight route, pushing digitalization of cross-border transport as cargo volumes keep rising. Industrial Expansion: Kazakhstan advanced a $15bn industrial park project in Pavlodar for deep aluminum processing, targeting large capacity and thousands of jobs. Energy Trade: Kazakhstan plans to expand electricity trade with neighbors and prioritize energy storage, grid modernization and interconnectors. Budget & Infrastructure: Republican budget revenues hit 100.9% of plan, with growth driven by VAT, corporate income tax, mineral extraction tax and oil export duties. Agriculture & Exports: Turkistan harvested over 1,000 tons of melons and watermelons, with exports to Russia underway. Water Security Warning: A water expert warned salinization could trigger food crises and migration pressures. Aviation & Regional Connectivity: Renovated Balkhash airport reopened with subsidized flights, supporting tourism growth. Public Safety & Society: inDrive rolled out an anti-bullying social initiative encouraging parents to talk to children. Culture & Heritage: Archaeologists unearthed artifacts at the medieval Zhankent settlement, including ceramics, knucklebones and animal remains. Geology: A magnitude 3.8 earthquake was recorded near Tekeli in Zhetysu.

Agro-Exports Surge: Kazakhstan’s agricultural exports to Iran jumped 97% year-on-year to $238.5m, with grain exports more than doubling to 1.1m tons; talks also covered scaling beef and lamb for halal and veterinary standards and inviting Iranian investors into grain and oilseed processing. Coal Chemistry Push: The Ministry of Energy says Kazakhstan will launch production of gas, diesel fuel, and coke from coal, including a 1m tons/year metallurgical coke plant in Karaganda and two 100,000 tons/year coal-to-diesel projects in Pavlodar and Karaganda. Energy-Industry Dealmaking: WoodKSS won an expanded engineering and project support contract with Tengizchevroil, reinforcing local delivery across Atyrau and Almaty. Transport Upgrade in Astana: Astana’s new driverless LRT hit daily ridership of 65,000–75,000 in early weeks and construction has started on phase two toward Kosshy. Nuclear Cooperation: Kazakhstan and Russia moved ahead on the first nuclear power plant project, with trade and energy cooperation also highlighted in talks ahead of broader industrial ties. Regional Trade Links: Hong Kong Chief Executive John Lee began a Central Asia mission aimed at new markets, with Kazakhstan and Uzbekistan on the agenda for sector MOUs.

Kazakhstan–Russia Trade Surge: President Tokayev told Putin in Astana that bilateral trade is nearing record levels and could top $30B soon, with Russia also leading FDI (about $29B) and 177 joint projects worth roughly $53B. Nuclear & Energy Deal Momentum: Talks also covered energy infrastructure, including a possible gas pipeline to China via Kazakhstan (up to 35 bcm/yr) and continued cooperation tied to Rosatom’s $16.5B nuclear power plant agreement. EAEU Integration Push: At the Supreme Eurasian Economic Council in Astana, Tokayev said EAEU internal trade could exceed $100B this year, while leaders highlighted growth and trade liberalisation. AI in Industry Debate: At the Eurasian Economic Forum in Astana, Putin warned that AI could eliminate entire professions as automation spreads across routine admin and technical work. Regional Business Links: A “Cooperation Without Borders” forum in Tashkent brought together Kazakhstan’s Turkestan Region and Uzbekistan’s Tashkent Region to expand trade, investment, tourism, and industrial cooperation. Diplomatic Boost: Cyprus President Christodoulides is set for a first-ever presidential visit to Kazakhstan, including a business forum and the inauguration of the Cyprus embassy in Astana.

Nuclear Diplomacy: IAEA chief Rafael Grossi says Kazakhstan could safely store Iran’s highly enriched uranium stockpile (about 440 kg), citing Astana’s existing low-enriched uranium “bank” and offering a practical option if Washington and Tehran reach a deal. Nuclear Power Deal: After Putin’s Astana visit, Russia frames financing of Kazakhstan’s first nuclear power plant as standard practice, with funds returned with interest, while inter-agency nuclear and radiation safety cooperation is set for 2026–2030. Oil & Production Risk: Reuters reports an accident at the Tengiz field cut output sharply (from ~125,000 tons to 5,000–10,000), with CPC export shipments hit and repairs expected to take about a week. Pharma Investment Surge: Kazakhstan’s pharmaceutical investment is rising fast—$46.9m (2023), $91.3m (2024), and $142.8m (2025)—as firms modernize plants and expand localized medicine and medical device production. Trade & Logistics Push: Kazakhstan and Kenya explore linking the Middle Corridor to East African ports (Mombasa, Lamu) and even propose direct Astana–Nairobi flights to speed cargo flows. Regional Cooperation: Uzbekistan and Kazakhstan sign a practical roadmap covering automotive, energy, chemicals, metallurgy, pharma, logistics, construction materials, housing, and agriculture. EAEU Energy Talks: Kyrgyzstan signals readiness to deepen EAEU integration across electricity, gas, and energy infrastructure, stressing market mechanisms and energy security.

Uranium & Nuclear Diplomacy: Kazakhstan says it is open to storing Iran’s enriched uranium stockpile under an eventual US-Iran nuclear deal, with IAEA chief Rafael Grossi citing Astana’s readiness to use its IAEA-supervised low-enriched uranium bank. US-Iran Ceasefire Watch: Trump says he will make a “final determination” on extending the Iran ceasefire and reopening the Strait of Hormuz, but key nuclear and sanctions terms remain disputed. Oil & Operations: Tengiz Field output at Chevron-led operations fell sharply after an accident, with Kazakhstan’s energy ministry reporting a temporary decline and monitoring while restoration is expected within about a week. Logistics & Aviation: Cargolux is resuming flights to Kazakhstan via Astana, planning up to 14 weekly cargo flights from June 1, reinforcing the Middle Corridor push. EAEU Integration Drive: At the Supreme Eurasian Economic Council in Astana, leaders highlighted EAEU growth, digital transport corridors, and AI as a new integration tool, while Kazakhstan’s chairmanship priorities focus on logistics digitalization and industrial/agro transformation. Eurasian Trade Expansion: Kazakhstan and Iran reaffirm plans to lift bilateral trade toward $3bn, stressing banking obstacles, engineering services, and logistics/rail cooperation. Green Industry: Almaty begins construction of a waste-to-energy plant aimed at processing household solid waste and generating electricity for the city.

EAEU Summit in Astana: Leaders meeting in Astana signed a batch of EAEU documents and pushed deeper integration, with trade liberalisation talks flagged as intensifying (including with India) and customs/logistics digitalization on the agenda. Nuclear Deal Focus: Kazakhstan and Russia moved closer on the Balkhash nuclear power plant after Putin signed an agreement on basic principles and conditions, but financing details remain unclear, keeping project delivery questions front and center. Energy & Industry Signals: Kazakhstan’s Tengiz saw a temporary output dip after an operational disruption, while rail operators signed a plan to digitalize Kazakhstan–Russia freight. AI for Industry: The Eurasian Economic Forum put AI application in customs, transport, industrial production and quality control under the spotlight, with Tokayev urging faster adoption across the bloc. Armenia Pressure in the Bloc: The EAEU warned it may suspend Armenia later this year over EU ambitions, calling for a referendum—an issue likely to spill into regional business planning.