ASTANA – According to the National Bank’s forecasts, inflation is expected to reduce to 5% by late 2025 to early 2026, reported Kazinform news agency on Jan. 31.
The latest projections from the bank indicate that inflation in 2024 is expected to range between 7.5% and 9.5%, while in 2025, it is anticipated to be between 5.5% and 7.5%.
These forecasts carry certain risks that could impede a swift return of inflation to the target. Among these risks are unanchored inflation expectations, potential fiscal policy strengthening, and growth in consumer lending. Additional uncertainties stem from fluctuations in food prices due to poor harvests and ongoing reforms in regulated pricing.
Factors influencing inflation in Kazakhstan
The National Bank notes a significant decrease in the country’s annual inflation, which has more than halved, reaching 9.8% in December 2023 after peaking at 21.3% in February of the same year, demonstrating a consistent trend.
However, the National Bank cautions that certain risks to inflation persist. With further inflation deceleration expected in 2024, the bank will consider further reducing the base rate. This decision will be made while maintaining moderately tight monetary conditions to steer inflation back to the 5% target and stabilize inflation expectations. The National Bank also acknowledges the potential for pauses in base rate adjustments to gather data and monitor risks.
Under the framework of inflation targeting a floating exchange rate, the National Bank will adjust the base rate to reduce and stabilize inflation gradually. Decisions regarding the rate will be grounded in macroeconomic data analysis and forecasts.
Continued efforts will focus on enhancing the predictability of economic agents’ expectations through proactive communication strategies. This approach aims to clarify monetary policy’s future direction, fostering a stable environment for businesses and the public.
According to the forecast, cohesive measures from the National Bank, the government and other state bodies remain crucial in achieving low and stable inflation. This partnership will operate within the scope of the comprehensive plan to control and reduce inflation for 2023-2024.