Price barometer (August 2022)

Monthly inflation overview: causes, elements, forecasts

Main conclusions


Mutual sanctions leading to deglobalization and China’s zero-tolerance policy toward COVID-19 have caused disruptions in global supply and production chains, and all of these contribute to the cost increase of production factors	As a result of geopolitical instability, the change in the supply and demand balance for energy sources contributes to the preservation of high prices for them. At the same time, the hike is reflected in the pricing of final goods and services


The level of global inflation is still and expected to remain in the medium term unfavourably high	The internal pro-inflationary background is growing due to pessimistic inflation expectations and the continued consumer demand growth. The latter is provided by budget expenditures and increased activity in consumer lending


The main trigger of consumer inflation has shifted: prices for non-food products have begun to overtake the growth rate of food prices. Food inflation is temporarily restrained by the seasonal reduction in the price of fruits and vegetables	The growth of non-food inflation is supported by high import dependence, increased inflationary background in trading partner countries and the effect of exchange rate transfer


Seasonal shock and imbalances in the markets of certain types of market services, including those associated with the abolition of temporary restrictive measures of the Government, have made a perverse contribution to consumer inflation	By regions, annual inflation was in the range of 13.6-19.2%. There was an increase in the diversity of inflationary processes in the regions


We expect inflation to rise to 17-17.5% (16-18% according to the updated National Bank of the Republic of Kazakhstan forecast) by the end of the year. The observed strengthening of inflationary processes together with high risks of further acceleration of inflation determine it necessary to take measures to cool consumer demand