Kazakhstan's service providers are stabilizing

Kazakhstan’s service sector showed the first signs of recovery in March. While it is still too early to speak of a genuine upswing, the downward trend has noticeably slowed.

This is indicated by the latest Purchasing Managers’ Index from Freedom Holding. The Business Activity Index rose from 48.0 points in February to 49.2 in March. While the figure remains below the 50-point growth threshold, it now signals only a moderate decline in activity.

The main factor behind this was a slight uptick in new orders. Following a weaker phase, at least some of the demand has thus returned. This helped companies limit the decline in their business.

According to Freedom Holding’s assessment, the sector is currently adapting to two pressures simultaneously: rising costs and subdued demand. On a positive note, however, cost pressures have recently eased. Input prices are approaching the levels seen at the end of 2025, indicating easing inflationary pressures.

Businesses’ expectations for the coming twelve months have also improved slightly. However, optimism remains cautious and continues to lie below the long-term average.

Some service providers continued to report declining business in March. They cited financing difficulties, the lingering effects of the VAT increase at the start of the year, and political uncertainty as reasons. At the same time, new customers and additional orders helped cushion the downturn.

Overall, the picture is mixed: the Kazakh service sector remains under pressure but is gaining some stability. Especially against the backdrop of a weaker industrial sector, it thus remains an important pillar of the overall economy.