Kazakhstan: Inflation stable for third consecutive month in June
July 3, 2017
Consumer prices rose 0.4% from a month earlier in June, coming in slightly below May’s 0.5% print. June’s increase was broad-based across all categories, with food prices (+0.7% month-on-month) rising the fastest in the month. Meanwhile, prices for services (+0.1% mom) climbed at the slowest pace.
Inflation was unchanged at 7.5% in June for a third consecutive month, and was again the lowest print since September 2015. Inflation has been stabilizing in recent months after falling substantially in the latter half of last year as a result of a base effect and is expected to continue gradually moderating in the coming months as the base effect falls further away. Given the rapid drop in both inflation and inflation expectations, the National Bank of Kazakhstan slashed interest rates by a cumulative 500 basis points last year and by a further 150 basis points so far this year.
Inflation should continue easing as the economy more fully adjusts to an increasingly stable exchange rate and the recovery in global energy prices. Annual average inflation fell from 11.4% in May to 10.5% in June, which was the lowest print since April 2016.
Author: Christopher Thomas, Economist