Kazakhstan Inflation March 2017


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.

After falling to just above the upper ceiling of its target range in 2016, the National Bank of Kazakhstan expects inflation to fall to a range of between 6.5% and 7.0% this year. For 2018, the Bank expects inflation to fall within target of 5.0% and 7.0%. FocusEconomics Consensus Forecast panelists expect inflation to end 2017 at 7.1%, which is unchanged from the previous month’s forecast. By the end of 2018, our panel expects inflation to fall to 6.2%.

Author:, Senior Economist

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Kazakhstan Inflation Chart

Kazakhstan Inflation March 2017

Note: Month-on-month changes and annual variation of consumer price index in %.
Source: Republic of Kazakhstan Agency of Statistics.

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