The National Bank keeps its base rate

Today, the National Bank of the Republic of Kazakhstan decided to keep the base rate at the same 14.5% level. At the same time, it updated his estimates:




(2.8-3.8% – June forecast)



Inflation 16-18%


7.5-9.5% (7.5-9.5%) – 2023

5.5-7.5% (upper bound of the target corridor is 4-5%) – 2024

According to the latest data, inflation expectations have also worsened: they amounted to 16.5% by August data, against 15.6% in July.

Following the classic Taylor Rule, the National Bank overview the situation on inflationary processes, with GDP and other macroeconomic indicators. These data indicate an increase in price instability in the country, which, according to the National Bank of the Repubic of Kazakhstan, is a reaction to external shocks and does not require a further increase in the base rate.

The gradual decline in oil prices and world food prices observed in recent months could pause tightening monetary conditions. At the same time, the likely deterioration in the prospects for economic growth, which may occur after monetary tightening, has pushed more towards the current decision of the regulator.

The deterioration of the IMF’s forecasts regarding the further development of the global economy, together with the continuing uncertainty over the CPC issue, a reduction in production volumes due to planned repairs at large deposits, as well as the emergence of threats to the current level of oil prices, have caused an increase in risks that may harm business activity in the country.

Thus, the current economic growth is ensured by a significant inflow of export earnings, and a corresponding increase in budget expenditures to maintain consumer and investment demand. A further base rate increase, and the observed decline in energy prices, which we cannot influence, will limit already under threat business activity. And in the case of shocks in the raw materials market or issues with their transportation, they can even lead to recessionary phenomena in terms of severely squeezed domestic market business activity.

Given the significant negative effect of these risks, maintaining the rate at the current level is necessary to ensure acceptable financing conditions for business and the existence of some market projects, which prevails over the risks of a likely increase in inflationary pressure.

Thus, in light of the current decision, the real rate is still negative. This generally corresponds announced in the press release of the National Bank’s task to promote economic growth. However, taking into account the noted inflationary processes and their impact on other economic indicators to ensure growth will be much more complicated.

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