Kazakhstan’s Monetary Policy Committee Plans to Lower Base Rate to 11.9% by 2025
The National Bank of Kazakhstan’s Monetary Policy Committee (MPC) has released forecasts for the trajectory of the base rate for the years 2024-2026. According to these projections, the base rate is estimated to be 11.9% in 2025 and 10% in 2026.
The Monetary Policy Report, which is published quarterly, will include assessments of the base rate’s future path, as well as forecasts for gross domestic product (GDP) and inflation.
In terms of GDP growth, Kazakhstan saw a slowdown in the first half of 2024, with growth reaching 3.2%. This deceleration was attributed to a slowdown in the mining sector and slower growth in services. Forecasts suggest GDP growth will be between 3.5-4.5% in 2024, 5.0-6.0% in 2025, and 4.9-5.9% in 2026.
Inflation trends in the first half of 2024 align with the National Bank’s forecasts. Inflationary pressures are increasing due to factors such as fiscal stimulus, tariff hikes in the housing and utility sector, sustained domestic demand, and heightened inflation expectations.
To combat inflation, a moderately tight monetary policy is expected to bring core inflation down to 5% by 2026. Inflation is projected to be between 7.5-9.5% in 2024, 5.5-7.5% in 2025, and 5-7% in 2026.
The MPC of the National Bank recently decided to maintain the base rate at 14.25% on August 29th. Stay tuned for more updates on the country’s economic outlook and monetary policy decisions.
