National Bank of Kazakhstan Addresses Persistently High Inflation Rates
Despite a general downward trend throughout the year, annual inflation in Kazakhstan rose to 8.5% in October, a slight increase from the previous month, Deputy Governor of the National Bank of Kazakhstan (NBK) Vitaliy Tutushkin stated during a Senate plenary session.
Tutushkin highlighted that global military conflicts, declining international trade, and reduced investment levels are key external factors affecting the country’s economic stability. Domestically, stabilizing food prices has been a crucial factor in easing inflation, with food price inflation slowing to 4.9%.
“I would like to note that inflation is already more than 2.5 times lower than the peak observed in February 2023. However, this level is still significantly higher than the NBK’s target of 5%,” he said.
However, non-food inflation remains a challenge, currently at 7.8% annually, with a less significant slowdown. The most significant inflationary pressure comes from paid services, where costs have surged by 14.3% over the past year.
Despite these challenges, Kazakhstan’s GDP has grown by 4% in the first nine months of 2024, building on a strong performance from the previous year.
Tutushkin identified several inflationary risks moving forward. Externally, these include rising prices in major trading partner countries and global increases in food costs. Internally, factors such as rising utility tariffs, sustained high domestic demand driven by fiscal policies, and unanchored inflation expectations are contributing to continued price pressures.
The National Bank’s analysis underscores the complexity of addressing inflation, with a mix of global and local dynamics shaping Kazakhstan’s economic landscape. Stabilizing these factors remains a key priority for the nation’s economic policymakers.
“We see that the non-oil deficit remains high, and a significant share of budget expenditures still depends on transfers from the National Fund,” he added.
