Kazakhstan's National Bank keeps the base rate unchanged at its current position
In Kazakhstan, the inflation rate has reached a staggering 11.8% in June 2025, marking a significant challenge for the economy. The high inflation rate is primarily driven by faster price increases in key sectors such as food products, paid services, and non-food products.
The price growth in food products has been particularly sharp, with a 10.6% annual growth rate in June, up from 9.6% the previous month. Paid services inflation also increased slightly to 16.1%, while non-food product prices saw a notable increase of 9.4%.
These price hikes have been influenced by elevated costs across the consumer basket, putting upward pressure on the Consumer Price Index (CPI). In response, the Monetary Policy Committee (MPC) of the National Bank of Kazakhstan has likely taken steps to control inflation. While the exact base rate decision isn't detailed, countries facing above-target inflation typically raise base rates to tighten monetary policy, curb demand, and stabilize prices.
The MPC's actions seem to be effective, as the monthly inflation rate has slowed from 1.2% in April to 0.9% in May 2025. This trend continues, with the monthly inflation rate slowing further to 0.8% in the latest data.
The increase in imported goods and key agricultural products, along with high retail lending growth rates, have played a significant role in food inflation. The continuation of tariff reforms, fiscal stimulus, and stable consumer demand contribute to persistent inflationary pressure.
Uncertainty persists in surveys, suggesting potential volatility in future inflation trends. Market professionals' inflation expectations for the current year have been revised from 10.7% to 11%. Despite these challenges, the Kazakhstan government appears to be taking proactive measures to ease inflation and stabilize the economy.
| Factor Contributing to High Inflation | Effect on Inflation Rate | |--------------------------------------|-------------------------| | Price growth in food products | Major driver, 10.6% YoY growth | | Increases in paid services prices | Moderate increase, 16.1% YoY | | Rise in non-food product prices | Notable increase, 9.4% YoY |
| Monetary Policy Committee Response | Likely Action | |-------------------------------------|-------------------------| | Inflation at 11.8% in June 2025 | Base rate likely adjusted (tightened) to control inflation | | Monthly inflation decline (Apr-May) | Indicates effectiveness of policies to ease inflation |
The Monetary Policy Committee of the National Bank of Kazakhstan has set the base rate at 16.5% per annum, a move aimed at tightening monetary policy and controlling inflation. As Kazakhstan navigates these economic challenges, the MPC's proactive and measured approach offers some hope for a stable economic future.
The high inflation rate in key sectors such as food products, paid services, and non-food products is linked to the finance sector, as the increase in imported goods and retail lending growth rates have played a significant role in food inflation. In response, the Monetary Policy Committee (MPC) of the National Bank of Kazakhstan has decided to tighten monetary policy by raising the base rate to 16.5% per annum, an action aimed at controlling inflation in the business sector, as higher interest rates are expected to curb demand and stabilize prices.
