ASTANA – The Monetary Policy Committee of Kazakhstan’s National Bank decided on June 5 to set the base rate at 17% per year, with a ±1 percentage-point corridor, citing updated macroeconomic forecasts and easing inflationary pressures. Annual inflation continued to slow, reaching 10.4% in May, down from a peak of 12.9% in September last year.
The decline was driven 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 inflation expectations for one year ahead stood at 12.7%. The National Bank noted that although inflation expectations remain elevated, they have stabilized in recent months.
External price pressures remain mixed: global food prices have increased moderately, while disinflation in advanced economies has slowed. The oil price assumption in the baseline scenario was revised upward to $90 per barrel for this year, reflecting geopolitical tensions and then gradually declining in subsequent years.
This year’s inflation forecast was revised downward to 9-11%, reflecting faster-than-expected disinflation, limited pass-through of tax changes, and a stronger tenge. Inflation is expected to decline to single digits this year, with medium-term convergence toward the 5% target.
GDP growth was upgraded to 4.5-5.5%, supported by stronger economic activity and improved external price assumptions, while growth is projected at 3.5-4.5% in 2027-2028. The bank stated that future policy decisions will depend on incoming inflation data, demand conditions, fiscal developments, and external risks.
The next decision on the base rate is expected on July 24.