ALMATY – The Monetary Policy Committee of the National Bank of Kazakhstan (NBK) has decided to keep the base rate unchanged at 18%, citing updated macroeconomic forecasts and a continued balance of inflationary risks.
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Annual inflation eased slightly to 12.6% in October, but price pressures remain elevated across most components, reported the regulator’s press service on Nov. 28.
Food inflation accelerated to 13.5%, while non-food inflation rose to 11%. Service inflation slowed to 12.9% due to administrative cuts in regulated utility tariffs.
The NBK noted that underlying pressures persist due to strong domestic demand that continues to outpace supply, as well as secondary effects from the fuel market liberalization and tariff reforms. Core inflation remained high at 1% month-on-month, equivalent to an annualized rate of 12.2%, and nearly 80% of items in the consumer basket are rising faster than the 5% target.
Inflation expectations also remain elevated as short-term expectations rose to 13.6% in October, while long-term expectations increased to 14.3%, limiting the pace of disinflation.
Forecast revisions
In its updated forecast, the NBK kept the Brent oil price assumption at $60 per barrel for the foreseeable horizon. The inflation forecast was revised upward, reflecting stronger inflationary outcomes this year, higher inflation expectations, and anticipated increases in regulated tariffs.
According to the new projections, inflation is expected to reach 12-13% in 2025, moderate to 9.5-12.5% in 2026, and ease further to 5.5-7.5% in 2027. The wider forecast range for 2026 reflects heightened uncertainty associated with the implementation of tax reforms and shifts in aggregate demand.
Risks to the forecast include supply-demand imbalances, faster external inflation, secondary effects from regulated price adjustments, higher fuel prices and increased VAT. A major source of uncertainty is the planned eight trillion tenge (US$14.8 billion) financing program through Baiterek Holding, equivalent to 4.4% of GDP in 2026, which could further increase price pressures.
Growth outlook
Kazakhstan’s GDP growth forecast for 2025 has been upgraded to 6–6.5%, driven by higher oil output and stronger investment and consumer demand ahead of the 2026 VAT reform. However, the bank lowered its 2026 forecast to 3.5–4.5% due to a high base and the expected dampening effect of fiscal consolidation. Growth in 2027 is projected at 4–5%.
The bank emphasized that sustained domestic demand, declining real incomes, and higher imports highlight the need for strong coordination between fiscal and monetary policy. The government, NBK, and Agency for Regulation and Development of the Financial Market are jointly implementing the 2026–2028 Program of Joint Actions aimed at macroeconomic stabilization and inflation reduction.
Given elevated inflation expectations and the lagged impact of tariff and tax reforms, the National Bank stated that it does not expect room for rate cuts before the middle of 2026. If inflation fails to demonstrate a stable downward trajectory, the regulator does not rule out further tightening.
Earlier, The Astana Times outlined what the base rate means, underscoring growing concerns about accelerating inflation and financial stability as the economy continues to face both internal and external pressures.
