Kazakhstan: Inflation falls further in January
February 3, 2017
Consumer prices in Kazakhstan rose 0.8% from the previous month in January, coming in mildly below the 0.9% increase observed in December. January’s result stemmed from a slower increase in prices for food, clothing and transport.
Inflation fell from 8.5% in December to 7.9% in January, the lowest rate since September 2015. Inflation began to fall abruptly from October 2016 due to a base effect and is expected to continue falling in the coming months, although at a slower pace, as the base effect fades. Due to the rapid fall in inflation and inflation expectations, the National Bank of Kazakhstan cut interest rates by a cumulative 500 basis points last year. At the first meeting of this year, the Bank decided to maintain interest rates.
As the economy adapts to new economic conditions, namely a more stable exchange rate and rising oil prices, the trend confirms that inflation is decelerating. Annual average inflation fell from 14.7% in December to 14.1% in January.
Author: Ricardo Aceves, Senior Economist