The National Bank kept the base rate at 16.75%

The decision was based on the updated macroeconomic forecasts of the National Bank of the Republic of Kazakhstan.

The main reasons were as follows:

  • still high rates of inflation growth despite their observed slowdown;
  • the underlying price pressure remains high;
  • unstable inflationary expectations contributing to a prolonged pressure easing;
  • rising risks of accelerating global inflation due to a tight labour market, strong consumer demand and the opening up of China’s economy.

Improvement in the conjuncture of internal and external factors contributed to a more positive revision of forecasts:

The NBK forecasts, in %, YoY202320242025

The key risks of the forecast are:

  • on GDP growth rates: issues of access of Kazakhstan’s exports to international markets;
  • on inflation: supply shocks in the market of fruit and vegetable products, which may lead to an acceleration of food inflation; likely reforms of housing and utility tariffs and fuel prices, their direct and indirect impact on consumer prices; acceleration of inflation in the Russian Federation cause of rising budget expenditures, the ruble weakening and sanctions.

! A new signal to the market: the rate will remain unchanged until the summer of 2023.

Jusan Analytics comment: the current decision was due to a balance of internal and external factors and was confirmed by the forward guidance of the regulator. Ensuring the preservation of restraining monetary conditions was a rational action for following reasons:

  1. to reduce the impact of the risks of tenge weakening due to a variety of factors;
  2. to limit consumer demand for a long time to achieve a disinflationary effect on prices;
  3. adherence to the previously indicated direction contributes to increased confidence and, as a result, stabilization of inflation expectations.
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