National Bank of Kazakhstan Cuts Base Rate to 17%
The Monetary Policy Committee of the National Bank of Kazakhstan has decided to reduce the base rate to 17% per annum, with a corridor of ±1 percentage point, citing updated macroeconomic forecasts and continued easing of inflationary pressures.
According to the National Bank, annual inflation slowed to 10.4% in May, down from a peak of 12.9% recorded in September last year. The decline was driven by moderating food price growth, stable non-food inflation supported by a stronger tenge, and continued deceleration in services inflation. Monthly inflation also slowed to 0.7%, while one-year inflation expectations stood at 12.7%.
The regulator noted that although inflation expectations remain elevated, they have stabilized in recent months. External price dynamics remain mixed, with moderate increases in global food prices and slower disinflation in advanced economies.
In its updated forecast, the National Bank revised the oil price assumption upward to $90 per barrel for the current year, reflecting ongoing geopolitical tensions, with a gradual decline projected in subsequent years.
The inflation outlook for 2026 was revised downward to 9–11%, reflecting faster-than-expected disinflation, limited pass-through of tax changes, and the strengthening of the national currency. Inflation is expected to decline to single digits in 2026, with medium-term convergence toward the 5% target.
Economic growth projections were also revised upward. GDP growth is now expected at 4.5–5.5%, supported by stronger domestic economic activity and improved external price conditions, with growth projected at 3.5–4.5% in 2027–2028.
The National Bank emphasized that future monetary policy decisions will depend on incoming inflation data, domestic demand, fiscal developments, and external risks. The next base rate decision is scheduled for July 24.
Photo credit: The National Bank
