President Tokayev Holds Meeting with National Bank Chairman to Evaluate Inflation Rates and Economic Prospects
Kazakhstan's National Bank Maintains Tight Monetary Policy to Combat Inflation
In a meeting held at Akorda on January 24, 2024, Kazakh President Kassym-Jomart Tokayev and National Bank Chairman Timur Suleimenov reviewed the implementation of monetary policy in 2024 and discussed plans for the current year.
The meeting highlighted a stable banking sector in Kazakhstan, with the National Bank's gross gold and foreign exchange reserves growing by 27.4% to reach $45.8 billion. The performance of Kazakhstan's gold reserves and the performance of the National Fund's asset management, which generated $4.5 billion in income in the previous year with a return of over 7.5%, were also discussed.
However, the meeting also acknowledged external inflationary pressure and the persistence of internal inflationary risks. According to Suleimenov, the inflation rate for Kazakhstan in 2024 was within the expected range of 8.6%.
To address these challenges, the National Bank is taking measures to stabilize prices and achieve a medium-term inflation target of 5%. The Bank is maintaining a tight monetary policy stance, keeping its base interest rate at 16.5% likely until the end of 2025 to curb inflationary pressures.
The President emphasized the need for continued coordination between the National Bank and the government to stabilize inflation and ensure economic stability. The meeting also addressed the performance of Kazakhstan's pension assets.
As of mid-2025, Kazakhstan’s inflation rate is around 11.8%, marking the highest level since September 2023. The key drivers of inflation include food price rises (10.6% year-on-year), higher costs for paid services (16.1%), and increases in non-food prices (9.4%). Monthly inflation in June eased slightly to 0.8%, the slowest pace since September 2024.
For the remainder of 2025, the National Bank of Kazakhstan projects inflation to remain between 10.5% and 12.5%, with upward revisions from earlier forecasts due to persistent price pressures. The Deputy Prime Minister and Minister of National Economy indicated that inflation for 2025 is targeted at 10-11%, with forecasts for 2026 aiming for a reduction in inflation to 8-10%.
Should inflation stabilize within the target range next year, the National Bank may consider easing monetary policy by cutting the base rate.
In summary, Kazakhstan is experiencing elevated inflation, but the National Bank is actively stabilizing prices through a high base rate and signals readiness to loosen monetary policy only when inflation comes down within the desired range.
References:
- Central Bank of Kazakhstan
- Kazakh Invest
- Trading Economics
- Reuters
The National Bank's tight monetary policy is a business strategy aimed at combating the persistent inflation in Kazakhstan's economy. In the upcoming year, a potential easing of the monetary policy may be considered if inflation stabilizes within the targeted range, which is a significant decision for Kazakhstan's finance sector as it could impact various business activities.
