What question did this study set out to answer?

The study aims to evaluate how the oil and gas sector influences Kazakhstan's economic growth through various channels.

March 5, 2026Open Access

Analysis of production, fiscal, and external sector channels of economic growth in Kazakhstan’s oil and gas sector

Key Points

The study aims to evaluate how the oil and gas sector influences Kazakhstan's economic growth through various channels.
Analyzed official data from national and international statistics bodies.
Employed cointegration analysis and vector error correction models.
Utilized short-term ordinary least squares specifications for economic indicators.
A stable long-term relationship exists between oil production and GDP.
Gas production significantly contributes to short-term GDP growth.
Tax revenues from the oil and gas sector show a moderate positive impact.
The external sector has the strongest short-term effect on GDP through currency depreciation.

Abstract

Type of the article: Research ArticleAbstractGiven the instability of global energy markets and recurring price shocks, it is increasingly important to assess the sustainability of economic growth in countries heavily dependent on oil and gas, such as Kazakhstan. The purpose of this study is to assess the impact of the oil and gas sector’s production, fiscal and external sector transmission channels on Kazakhstan’s economic growth during 2010–2024. The empirical base includes official data from the Bureau of National Statistics of Kazakhstan, the Ministry of Finance, and the World Bank, as well as economic indicators related to exchange-rate dynamics and inflation. The study employs a combination of cointegration analysis, vector error correction models (VECM), and short-term ordinary least squares (OLS) specifications. The results show that oil production and GDP are linked by a stable long-term relationship, with the error-correction term indicating that about 24% of deviations from equilibrium are eliminated per year. Gas production emerges as a key short-term growth factor: a one-thousand-ton increase in gas production is associated with a 5.26 billion tenge (11.8 million USD) in GDP (p = 0.002). Tax revenues from the oil and gas sector exert a moderate positive effect on economic dynamics (p = 0.065), reflecting fiscal sensitivity to external conditions. The external sector channel exhibits the strongest short-term effect: a one-unit depreciation of tenge is associated with an average increase of 2.61 × 10⁵ tenge in nominal GDP (p lt; 0.01). Overall, the results indicate that Kazakhstan’s economic growth is shaped by long-term dependence on production and short-term transmission of price and financial shocks.AcknowledgmentsThis paper has been funded by the Science Committee MSHE RK (Grant “Strategy for the structural and technological modernization of the basic sectors of the economy of the Republic of Kazakhstan, taking into account ESG approaches: criteria, implementation mechanisms, and forecast scenarios” BR24993089).

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