Kazakh National Bank reduces base rate from 16% to 15.75%

The base rate in Kazakhstan has been reduced to 15.75%, according to the press service of the National Bank, Report informs referring to Kazakh media.

“The Monetary Policy Committee of the National Bank of the Republic of Kazakhstan decided to reduce the base rate to 15.75% per annum with a corridor of +/– 1 percentage point. The decision was made based on updated forecasts of the National Bank, data analysis and assessment of the balance of inflation risks,” the financial regulator said in a statement.

The annual inflation continues to slow down rapidly. Monthly inflation in October slowed to average historical values.

“At the same time, there are certain factors and risks that require attention. Pro-inflationary pressure remains in the domestic economy from fiscal stimulus, stable domestic demand, high and unstable inflation expectations,” the report notes.

The National Bank clarified that the inflation forecast for 2023 has been improved to 9.3-10.3%.

“The revision of the forecast for 2023 is associated with a more moderate than expected increase in tariffs for housing and communal services and a more restrained increase in prices for non-food products,” the report says.

The forecast for 2024 was kept at the level of 7.5-9.5%, for 2025 – at the level of 5.5-7.5%.

The economic growth forecast for Kazakhstan for 2024 and 2025 has been revised. This year, GDP growth, as before, is expected to be 4.2-5.2%. The forecast for 2024 was reduced to 3.2-4.2%; for 2025, taking into account the effect of a lower base, it was increased to 5.5-6.5%.

The main factor increasing the risks of the forecast is the uncertainty of oil production parameters in 2024-2025.

The next decision on the base rate will be announced on January 19, 2024.