National Bank of Kazakhstan Lowers 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 its peak of 12.9% recorded in September last year. The decline was supported by moderating food price growth, stable non-food inflation amid a stronger tenge, and continued easing 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 inflationary factors remain mixed, with moderate growth in global food prices and slower disinflation trends in advanced economies.
The National Bank revised its baseline oil price assumption upward to $90 per barrel for 2026, reflecting ongoing geopolitical tensions, with prices expected to gradually decline in subsequent years.
The inflation forecast for 2026 was lowered to 9–11%, reflecting faster-than-expected disinflation, the limited impact of tax changes on prices, and the strengthening of the national currency. Inflation is expected to return to single-digit levels this year and continue moving toward the medium-term target of 5%.
The economic growth outlook was also improved. Kazakhstan’s GDP growth forecast was revised upward to 4.5–5.5%, supported by stronger domestic economic activity and more favorable external conditions. Growth is projected at 3.5–4.5% in 2027–2028.
The next decision on the base rate is scheduled for July 24.
Photo credit: The National Bank
