Kazakhstan: Inflation falls to 18-month low in March
April 3, 2017
Consumer prices in Kazakhstan rose 0.5% from the previous month in March, which was half the 1.0% increase observed in February. March’s result stemmed from a broad-based slowdown in prices, mainly in food and housing.
Inflation edged down from 7.8% in February to 7.7% in March, the lowest rate since September 2015. Inflation began to fall abruptly starting in October 2016 due to a base effect and is expected to stabilize in the coming months, as the base effect fades. Due to the rapid drop in inflation and inflation expectations, the National Bank of Kazakhstan cut interest rates by a cumulative 500 basis points last year and by a further 100 basis points at its February meeting.
As the economy adapts to new economic conditions, namely a more stable exchange rate and higher oil prices, the trend confirms that inflation is decelerating. Annual average inflation fell from 13.5% in February to 12.9% in March.
Author: Ricardo Aceves, Senior Economist