BAKU, Azerbaijan, October 3. In the base scenario, the National Bank of Kazakhstan predicts that annual inflation will be within the range of 10-12 percent in 2023, 7.5-9.5 percent in 2024 and 5.5-7.5 percent in 2025, a source at the National Bank told Trend.
As the source noted, therefore, achieving the inflation target of around 5 percent is expected in the medium term.
"In 2022, in order to reduce the growing inflationary pressure, the National Bank increased the base rate 6 times from 9.75 percent to 16.75 percent, a total of 7 percentage points. Until August 25, 2023, the National Bank maintained the base rate at 16.75 percent", the source said.
The National Bank noted that the gradual slowdown of inflation processes and the established balance of risks allowed the NBK to reduce the base rate to 16.5 percent based on the decision of August 25, 2023.
"Future decisions of the National Bank on the base rate will depend on the current inflation rates and its sustainable part. At the same time, it should be noted the importance of the measures taken by the Government of the Republic of Kazakhstan to consolidate public finances and reduce their dependence on oil revenues.
The government is working to improve the quality of budget planning and the efficiency of public spending, and plans to ensure strict compliance with countercyclical budget rules when forming and clarifying the parameters of the republican budget from 2024. The Government is also implementing a set of measures to control and reduce inflation for 2023-2024," the source added.
In August 2023, annual inflation in Kazakhstan was 13.1 percent. Inflation reached its peak value in February of this year – 21.3 percent. Food inflation slowed to 12.4 percent in annual terms amid a slowdown in price growth for bakery products and cereals, meat and dairy products. The rise in prices for non-food products slowed to 13.5 percent. According to the National Bank's updated forecasts, in the baseline scenario, inflation is expected to continue to slow down.
Inflation in Kazakhstan in July 2023 slowed down over the year and amounted to 14 percent (in June 2023 - 14.6 percent), over the month - 0.6 percent (previous month - 0.5 percent). Prices for food products over the year increased by 13.5 percent (in June 2023 - 14.6 percent), for non-food products - by 15 percent (in June 2023 - 15.8 percent), for paid services - by 13. 6 percent (in June 2023 – 13.3 percent).