Kazakhstan’s manufacturing sector returned to growth in December, ending a prolonged period of contraction at the close of 2025, according to the latest Purchasing Managers’ Index (PMI) data released by Freedom Holding and S&P Global.

Freedom Holding’s Kazakhstan Manufacturing PMI index rose above the 50.0 no-change threshold to 51.0 in December, up from 49.0 in November, the accompanying statement to the PMI data said. The reading signalled the first improvement in manufacturing business conditions in seven months, although the pace of recovery was described as modest.

The upturn was supported by renewed increases in output and new orders, alongside growth in employment, purchasing activity and inventories of inputs. Firms reported a general improvement in demand conditions compared with the previous month.

Despite the return to expansion, confidence remained constrained by uncertainty surrounding an expected increase in value-added tax. Survey respondents indicated that concerns over the potential impact of the tax rise continued to weigh on sentiment, limiting the strength of the recovery.

Price pressures picked up towards the end of the year. Both input costs and output prices rose at a faster pace than in November, reflecting higher expenses faced by manufacturers. However, the rates of increase remained relatively subdued, suggesting that inflationary pressures were still contained.

Yerlan Abdikarimov, director of the financial analysis department at Freedom Finance Global, commented: "Kazakhstan’s manufacturing sector ended the year in growth territory – for the first time in seven months, the PMI exceeded the neutral 50-point mark. The sector remains subject to subdued demand and weak business confidence, while accelerating costs and output prices create additional risks to margins.

"Expectations for 12 months ahead continued to decline, reaching a new multi-year low, but still remain in growth territory (57.2 compared to an average of 70 points in 2025). The sector's further dynamics will depend on how the new tax rules play out in practice, businesses' ability to adapt to changing conditions, and demand's capacity to support the recovery that has begun."