National Bank Explains Ongoing High Inflation in Kazakhstan

"The level of inflation is significantly higher than the NBK’s target of 5%."

Photo credit: Adilbek Tauyekelov/Kazpravda

Despite an overall downward trend throughout the year, Kazakhstan's annual inflation increased to 8.5% in October, up from the previous month, Deputy Governor of the National Bank of Kazakhstan (NBK) Vitaliy Tutushkin said during a Nov. 21 plenary session of the Senate, according to the NBK’s press service, The Caspian Post reports citing Astana Times.

“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.

According to Tutushkin, military conflicts in the world and a general decline in world trade and investment continue to influence economic conditions. Internally, one of the important factors in reducing inflation is stabilizing food prices, which have slowed to 4.9%.

In contrast, inflation for non-food products stands at 7.8% annually, as it is slowing down less significantly. The highest growth remains in the inflation of paid services, which has reached 14.3%.

Meanwhile, Kazakhstan’s GDP grew 4% in the first nine months of 2024, despite a high base from the previous year.

Tutushkin also outlined inflationary risks, noting that externally, they are caused by rising prices in major trading partner countries and global food price increases. Internal factors include the ongoing growth of utility tariffs, continued high domestic demand amid fiscal stimulus, and unanchored inflation expectations.

“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.