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Kazakhstan plans to raise its minimum wage from 85 to 110 thousand tenge on January 1, 2027. On the president’s instruction, the measure is expected to affect about 1.8 million people (digitalbusiness.kz). Economist Rakhimbek Abdrakhmanov believes rising prices could limit the benefit of the increase.
What happened
The president ordered the minimum wage increase during his State of the Nation address. The raise will go first of all to workers whose pay falls below the new minimum.
The government estimates businesses’ additional payroll costs at 426 billion tenge. For entrepreneurs, that means higher costs. We have separately looked at what sole proprietors should consider when the minimum wage goes up to 110 thousand tenge.
What it means for workers
According to Abdrakhmanov, the minimum wage has not changed since 2024, and over that time rising prices have cut the purchasing power of salaries. So the economist sees the increase to 110 thousand tenge mainly as compensation for losses people have already suffered.
He names the drop in people’s purchasing power as one of the reasons behind the decision. When people can afford to buy less, small and medium-sized businesses run into extra problems too.
How businesses may respond to higher costs
“Entrepreneurs will face a classic choice: cut their own profit, raise prices, optimize headcount, or look for ways to boost labor productivity,” Abdrakhmanov says.
Some companies may pass the extra costs on to customers, the economist says. In that case, higher prices will eat up part of the raise. This is one possible business response, not a decision companies have confirmed.
Abdrakhmanov ties lasting income growth to creating quality jobs and raising productivity. In his view, without growth in output, periodic minimum wage increases alone will not bring a lasting improvement in living standards.
