Inflation holds steady in July

Latest reading: Inflation remained at June’s 11.8% in July, marking the joint-highest rate since August 2023. As a result, inflation remained well above the Central Bank’s medium-term target of 5.0%. Looking at the details of the release, price growth accelerated in food and non-food products, offsetting stronger cost pressures for paid services. As a result, the trend pointed up, with annual average inflation rising to 9.7% in July (June: 9.4%). Finally, consumer prices increased 0.72% over the previous month in July, moderating from the 0.85% rise logged in June. July's result marked the weakest reading since September 2024.

Panelist insight: Commenting on the outlook, Basak Edizgil and Clemens Grafe, analysts at Goldman Sachs, stated: “Looking ahead, we expect inflation momentum to pick up in August, driven by FX pass-through and the electricity tariff hikes. We expect headline inflation to peak in September […]. Despite the sharp Tenge depreciation in recent weeks, we think the downside risk to our forecast has increased from a faster decline in food inflation than we assumed. Our forecast already incorporated sizeable Tenge depreciation through 2025. Moreover, we think that the recent volatility was driven by temporary factors, and Tenge depreciation now appears overdone considering relatively strong fundamentals.”

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