ASTANA – Kazakhstan’s annual inflation fell below 10% in August, marking a further slowdown in price growth. Still, the latest figures do not yet show that inflationary pressures have been fully contained, highly respected Kazakh economist Ruslan Sultanov told The Astana Times.
Seasonal declines in food prices largely supported the improvement, while non-food goods and paid services continued to rise. Photo credit: auto.economictimes.indiatimes.com According to the Bureau of National Statistics, annual inflation slowed to 9.8% in August from 10.2% in July.
Monthly inflation remained at 0.6% for the second consecutive month. Food prices rose 9.5% year-on-year, compared with 10.1% in July, while non-food prices increased 11.4% and paid services 8.9%. Food prices were the main source of the August improvement, falling 0.1% month-on-month.
Seasonal produce recorded some of the sharpest declines, with potatoes down 12.3%, sweet peppers 11.9%, cabbage 9.7% and grapes 8%. Sultanov said the return to single-digit inflation is a positive signal, but the key issue is whether the trend can be sustained.
“The decline in annual inflation is a positive signal. But it is important to distinguish between the fact that inflation is declining and whether this decline is sustainable,” he said. The slowdown was also relatively broad geographically. Ten of Kazakhstan’s 20 regions recorded annual inflation below 10% in August.
The Karagandy Region had the lowest rate at 8.1%, while the North Kazakhstan Region had the highest at 12%. The gap between the highest and lowest regional rates was 3.9 percentage points. According to Sultanov, the spread of single-digit inflation across half the country is encouraging, but the coming months will show whether this moderation is becoming more durable.
Non-food prices increased 11.4% year-on-year in August, remaining the fastest-growing of the three major components of inflation. Monthly, they rose 0.8%, while paid services rose 1.2%. The difference between the components matters: food prices fell monthly, while non-food goods and services continued to put upward pressure on prices.
“The 11.4% increase in non-food prices is one of the indicators that prevents us from saying that the inflation problem has been solved. … Inflation is being driven not only by demand, but also by cost factors,” Sultanov said. He pointed to the exchange rate, imports, logistics and financing among the factors that can continue to influence prices.