According to the dashboard results for December, 20 out of 30 factors show an overheating of the economy. The analysis was carried out in 4 blocks: inflation, monetary, economic and external conditions. A semantic analysis of the National Bank of the Republic of Kazakhstan press release was also carried out.
Compared to the previous dashboard, 1 indicator in the monetary conditions block and 2 indicators in the economic environment block have moved to the overheating zone. Due to a significant acceleration of economic activity, while maintaining a positive increase in prices, there was an increase in overheating in the economy in January 2023. This development of the economy is mostly due to the recovery growth of the sectors affected last year.
We believe that the balance of current indicators corresponds to some softening of the inflationary background due to the easing of consumer demand pressure. Unstable and high inflation expectations, the continued growth of underlying inflationary pressure and the persistence of increased fiscal incentives that largely support consumer activity explain the predominance of pro-inflationary risks. In this regard, we expect the base rate to remain at the current level and the regulator to maintain hawkish rhetoric in general even after the reversal of the inflationary trend.
Read more in the paper
Monthly inflation overview: causes, elements, forecasts