Macroeconomic Forecast Kazakhstan

Despite appearing to stall in July, Kazakh inflation edged higher again in August, with the latest data release from the National Bank of Kazakhstan (NBK) reporting consumer price growth of 20.1% y-o-y, a marginal increase from 20.0% for July. However, month-on-month inflation eased to 0.8% in August from the 0.9% the growth of the previous month and the 1.2% peak seen in June. Given that inflation remains above 20%, with price pressures showing few signs of abating, we have revised up our end-year inflation forecast to 18.2% from our previous 15.5% projection. With fears over slowing economic growth starting to take precedent over spiralling prices (as confirmed by the 50bps cut to the NBK's refinancing rate to 10.50% in June), a return towards a more benign inflationary environment looks less than certain anytime soon.

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