Kazakhstan’s National Bank Raises Base Rate to 16.5% Amid Inflation Surge
The National Bank of Kazakhstan (NBK) has raised the base rate to 16.5% per annum with a corridor of +/- 1 percentage point, the bank’s press service announced on March 8. The decision comes in response to rising inflation and growing economic pressures.
Inflation in Kazakhstan reached 9.4% in February, with inflation expectations rising to 13.7%. The increase in prices has been driven primarily by higher service costs, strong consumer demand, and active lending. External factors, including economic developments in Russia and high global commodity prices, have also contributed to inflationary pressures.
The central bank projects inflation to reach 10-12% in 2025, 9-11% in 2026, and decline to 5.5-7.5% by the end of 2027. Despite current challenges, the bank remains optimistic about long-term economic stability.
“This will stabilize short-term and long-term inflation expectations and prevent the consolidation of the trend towards accelerating price growth,” reads the statement, adding that the move will preserve the purchasing power of incomes and protect the savings of the population, as well as support market participants’ confidence in tenge assets.
Economic growth in Kazakhstan is forecast to slow to 4.2-5.2% in 2025-2026. However, the implementation of reforms aimed at increasing fixed capital investment, attracting foreign direct investment, and promoting economic liberalization could help accelerate growth in the coming years.
The NBK’s move to tighten monetary policy reflects its commitment to curbing inflation and maintaining financial stability, ensuring a balanced approach to sustainable economic development.
