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Downward trend in inflation to continue in Kazakhstan despite updated forecast

Kazakhstan Materials 26 May 2023 16:52 (UTC +04:00)
Asmar Bayramova
Asmar Bayramova
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BAKU, Azerbaijan, May 26. Kazakhstan's National Bank updated the inflation forecast for 2023, Trend reports.

As noted by the bank, given the planned increase in utility tariffs, actual fuel price growth, and a higher fiscal impulse - factors that were not considered in the National Bank's previous forecasts - the inflation forecast has been updated.

In the baseline scenario, annual inflation is projected to range from 11 percent to 14 percent in the current year, from 9 percent to 11 percent in 2024, and from 5.5 percent to 7.5 percent in 2025.

The indirect contribution of fuel and utility price hikes to the consumer price index in 2023-2024 is estimated by the National Bank to be within the range of 1 to 2.5 percentage points. Nonetheless, a downward trend in inflation will continue, aided by declining global food prices and monetary conditions that gradually adopt a restraining character as annual inflation decreases.

Additionally, a slowdown in external inflation and inflation expectations is expected, accompanied by planned budget consolidation and a return to compliance with budgetary rules in 2024-2025.

Previously, the bank had projected that annual inflation for this year would fall within the range of 9 percent to 12 percent, for 2024 - 6 percent to 8 percent, and for 2025 - 4 percent to 6 percent.

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