ASTANA – Kazakhstan’s annual inflation fell below 10% in August, marking a further slowdown in price growth. Still, the latest figures do not yet show that inflationary pressures have been fully contained, prominent Kazakh economist Ruslan Sultanov told The Astana Times. Seasonal declines in food prices largely supported the improvement, while non-food goods and paid services continued to rise.
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According to the Bureau of National Statistics, annual inflation slowed to 9.8% in August from 10.2% in July. Monthly inflation remained at 0.6% for the second consecutive month. Food prices rose 9.5% year-on-year, compared with 10.1% in July, while non-food prices increased 11.4% and paid services 8.9%.
Food prices support the slowdown
Food prices were the main source of the August improvement, falling 0.1% month-on-month. Seasonal produce recorded some of the sharpest declines, with potatoes down 12.3%, sweet peppers 11.9%, cabbage 9.7% and grapes 8%.
Sultanov said the return to single-digit inflation is a positive signal, but the key issue is whether the trend can be sustained.
“The decline in annual inflation is a positive signal. But it is important to distinguish between the fact that inflation is declining and whether this decline is sustainable,” he said.
The slowdown was also relatively broad geographically. Ten of Kazakhstan’s 20 regions recorded annual inflation below 10% in August. The Karagandy Region had the lowest rate at 8.1%, while the North Kazakhstan Region had the highest at 12%. The gap between the highest and lowest regional rates was 3.9 percentage points.
According to Sultanov, the spread of single-digit inflation across half the country is encouraging, but the coming months will show whether this moderation is becoming more durable.
Non-food prices remain elevated
Non-food prices increased 11.4% year-on-year in August, remaining the fastest-growing of the three major components of inflation. Monthly, they rose 0.8%, while paid services rose 1.2%.
The difference between the components matters: food prices fell monthly, while non-food goods and services continued to put upward pressure on prices.
“The 11.4% increase in non-food prices is one of the indicators that prevents us from saying that the inflation problem has been solved. … Inflation is being driven not only by demand, but also by cost factors,” Sultanov said.
He pointed to the exchange rate, imports, logistics and financing among the factors that can continue to influence prices.
Domestic producers can also face external cost pressures through imported raw materials, equipment, packaging, components and spare parts. Higher financing costs can add further pressure through working capital, inventories, production and investment expenses.
This means that monetary policy alone cannot address all sources of inflation. Interest rates can influence demand and borrowing conditions, but structural factors such as logistics, productivity, domestic supply and import dependence also affect the prices consumers ultimately pay.
Autumn will test the trend
The structure of August inflation makes the fall period particularly important. The seasonal decline in fruit and vegetable prices will eventually weaken, providing a clearer picture of underlying price pressures.
“This coming fall will be a serious test. After the seasonal decline in food prices ends, it will be important to see whether inflation continues to slow and whether the number of regions with single-digit inflation increases,” Sultanov said.
He said monthly inflation, the dynamics of non-food goods and services, and the geographical distribution of price growth should be monitored closely.
If inflation continues to moderate after the seasonal food effect fades, this would provide stronger evidence that the decline is sustainable. A broader slowdown across food, non-food goods and services would also indicate that disinflation is becoming more firmly established.
For now, the 9.8% figure is an important milestone, but it should not be treated as the end of the inflation problem. The more important question is whether Kazakhstan can maintain the downward trend once seasonal factors become less favorable.
As Sultanov noted, the psychological significance of crossing below the 10% threshold is less important than the breadth and sustainability of the decline. The coming fall will show whether August marked a temporary easing of price pressures or a more durable shift in Kazakhstan’s inflation dynamics.
