Kazakhstan Inflation May 2017

Kazakhstan

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.

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 its target of 5.0% and 7.0%. FocusEconomics Consensus Forecast panelists expect inflation to end 2017 at 7.3%, which is unchanged from the previous month’s forecast. By the end of 2018, our panel expects inflation to fall to 6.2%.


Author:, Economist

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Kazakhstan Inflation May 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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