Kazakhstan: Inflation stabilizes in May
June 2, 2017
Consumer prices in Kazakhstan rose 0.5% from the previous month in May, matching April’s result. The increase in prices was seen across all categories in May.
Inflation came in at 7.5% in May, in line with April’s reading, which had marked 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, by a 100 basis points at its February meeting and by 50 basis points at its June 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 12.1% in April to 11.4% in May, the lowest figure since June 2016.
Author: Christopher Mc Innes, Economist