Kazakhstan Inflation


Kazakhstan: Inflation soars in October due to currency depreciation

November 3, 2015

Kazakhstan consumer prices jumped 5.2% in October over the previous month, which came in well above the 1.0% increase tallied in September. The monthly increase—the highest on record—reflected the impact of the devaluation of the Kazakh tenge, following the National Bank of Kazakhstan’s decision to let the currency to float freely. All prices that comprise the basket of goods increased over the previous month, in particular prices of food, clothing and footwear, furnishing and healthcare soared compared to the previous month.

As a result of the monthly jump, inflation climbed from 4.4% in September to 9.4% in October, which marked the highest level since December 2008. Under the new inflation targeting regime, the Central bank established an inflation target corridor of between 6.0% and 8.0% for the medium term.

Inflation is likely to continue rising in the coming months, mainly due higher prices for imported goods as a result of the devaluation of the national currency. However, as domestic demand is expected to weaken going forward, this should dampen inflationary pressures and bring inflation down the Central bank’s target in the medium term.

Following the jump in October, FocusEconomics Consensus Forecast panelists see that inflation will moderate in the coming months. Analysts see inflation at 7.5% at the end of 2015. This month’s forecast is unchanged from last month’s forecast. For 2016, the panel expects inflation to end the year at 7.8%, which is also unchanged over the previous month’s Consensus.

Author:, Senior Economist

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Kazakhstan Inflation Chart

Kazakhstan Inflation October 2015

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

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