Kazakhstan Lowers Base Rate to 15.75% as Annual Inflation Eases to 9.3%
Kazakhstan’s National Bank has reduced its base rate to 15.75%, citing a slowdown in annual inflation and lower inflation expectations. The decision comes as the economy continues to expand, although domestic and external price pressures remain.
Food inflation declined to 8.5% from 9.5%, reflecting lower fruit and vegetable prices and slower growth in meat prices. Non-food inflation eased to 11% from 11.4%, partly due to slower increases in fuel and lubricant prices. Services inflation remained at 8.9%, with prices for unregulated services continuing to rise rapidly.
Monthly inflation held at 0.6% in September, unchanged from August. After seasonal adjustment, it slowed to 0.7% from 0.9%, while the median of seasonally adjusted core inflation estimates remained at 0.7%. Inflation expectations for the next 12 months declined to 11.8% in September from 12.1% in August.
Market professionals also revised their inflation forecasts downward, expecting inflation to reach 9.5% by the end of 2026, compared with the previous forecast of 10%. The forecast for 2027 fell to 8.3% from 8.5%.
Kazakhstan’s GDP grew by 4.2% in January–September 2026, supported by non-resource sectors, particularly construction, manufacturing and transport. Fixed-capital investment increased by 7%, while investment in the non-resource sector, excluding budget funds, rose by 25%.
The National Bank noted that external conditions continue to exert inflationary pressure. Tensions in the Middle East have sustained high global energy prices, while the United Nations Food and Agriculture Organization’s food price index increased by 1.5% in September to 136 points, up 5.8% year on year. Higher prices for cereals, sugar and vegetable oils contributed to the increase amid unfavorable weather conditions and logistical constraints.
The bank also highlighted tighter global monetary conditions and identified domestic risks associated with fiscal and quasi-fiscal stimulus, elevated inflation expectations, fuel prices and regulated utility tariffs. External risks include rising prices for energy and food, inflation in Kazakhstan’s trading partners and tighter global financial conditions.
According to the National Bank, the decline in annual inflation and inflation expectations provided grounds for reducing the base rate. However, monetary policy will remain moderately tight to support disinflation and bring inflation to the 5% target in 2028.
The bank warned that annual inflation could rise temporarily toward the end of 2026 due to a base effect associated with regulated tariffs. A moratorium on utility tariff increases was in effect from October 2025 through the end of March 2026, following a 14% reduction in utility tariffs in the fourth quarter of 2025.
