ASTANA – The National Bank of Kazakhstan cut its base rate by 50 basis points to 16.25% on Sept. 4, as annual inflation fell below 10% after 11 consecutive months of disinflation. The regulator, however, warned that persistent inflation risks limit room for further easing.
National Bank Governor Timur Suleimenov. Photo credit: The National Bank of Kazakhstan
“The balance of risks remains tilted towards inflation. Therefore, we are committed to maintaining moderately tight monetary conditions,” National Bank Governor Timur Suleimenov said.
Inflation continues to slow
Annual inflation declined to 9.8% in August, with food inflation at 9.5%, non-food inflation at 11.4% and services inflation at 8.9%. Monthly inflation remained at 0.6%, while core inflation stood at 0.7%.
Inflation expectations for the next 12 months fell to 12.1% in July, from 13.4% in June. Professional market participants continue to expect inflation of around 10% by the end of 2026.
The National Bank kept its 2026 inflation forecast at 9-11%, but raised its 2027 forecast to 6.5-8.5%, from 5.5-7.5%, citing higher external inflation, revised regulated-price assumptions and a stronger fiscal impulse.
Inflation is expected to stabilize near the 5% target in 2028.
“Our goal is not simply inflation below 10%. Our goal is sustainable and stable inflation of around 5% in 2028,” Suleimenov said.
Risks remain
The National Bank identified stronger domestic demand, fiscal stimulus, inflation expectations, fuel prices and utility tariffs among the main risks. External risks include higher global food and energy prices amid geopolitical tensions.
Tengenomika analytical Telegram channel described the decision as a continuation of easing rather than a shift to soft monetary policy.
“The National Bank continued the easing cycle. This is a normalization of the degree of tightness rather than a transition to a soft policy,” they said.
EconomyKZ.org analytical Telegram channel experts said the decision reflected a balance between declining inflation and still-strong domestic demand, with future decisions depending on whether disinflation continues.
Growth remains resilient
The National Bank maintained its 2026 GDP growth forecast at 4.5-5.5%. Kazakhstan’s economy grew 4.1% year-on-year in January-July, while non-mining GDP increased by an estimated 5.4%.
Investment in fixed capital rose 7.7%, while retail trade increased 4.1% in real terms. GDP growth is projected at 4.5% in 2027, while the 2028 forecast was raised to 4-5% from 3.5-4.5%.
The National Bank said further rate decisions would depend on inflation, domestic demand, inflation expectations, regulated prices and fiscal and quasi-fiscal stimulus.
The next scheduled decision on the base rate will be announced on Oct. 23.
