Kazakhstan: Upward trend in inflation continues in May, but show signs of losing momentum
June 1, 2016
In May, consumer prices rose 0.5% over the previous month, which was a more moderate increase than the 0.6% rise observed in April. May’s reading mainly reflected the recent stabilization in the exchange rate and the fact that prices for food, alcoholic beverages, housing and healthcare increased more slowly than in the previous month.
Inflation increased from 16.3% in April to 16.7% in May. Although the reading represented the highest level in nearly eight years, the rapid increase in inflation is showing signs of losing momentum. In the last eight months, inflation has remained well above the National Bank of Kazakhstan inflation target established in September 2015. 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.
Due to the increase in May, the trend continues to signal that inflation is returning to levels last seen at the height of the global financial crisis. Annual average inflation jumped from 9.8% in April to 10.8% in May, which marks the highest level since July 2009.
Author: Ricardo Aceves, Senior Economist