National Bank Chair Discusses Reduction of Base Rate to 14.75% Due to Slowing Inflation
National Bank of Kazakhstan reduces base rate to 14.75% as inflation trends decelerate
ASTANA — National Bank Chairman Timur Suleimenov recently announced that the bank’s Monetary Policy Committee has made the decision to lower the base rate to 14.75% on Feb. 23. This move comes as a response to the trajectory of annual inflation, which has been showing signs of deceleration despite a decrease in rate, aligning closely with projected trends, the bank’s press service reported.
According to the bank’s statement, household inflation expectations have seen a consecutive decline over the past three months, signaling a positive trend. However, indicators reflecting the stable component of inflation have accelerated, highlighting the need for sustained efforts to maintain price stability.
While global inflation rates are on a downward trend due to contractionary monetary policies in various countries and declining energy and food prices, logistical challenges in certain regions and pockets of inflation acceleration in Russia and China are noted as concerns.
Suleimenov emphasized the importance of monitoring key indicators such as domestic demand, inflation expectations, fiscal policy uncertainties, and external economic conditions to maintain moderately tight monetary conditions with the primary objective of achieving a confident reduction of inflation to 5% within the medium term.
The bank’s forecasts predict inflation rates for this year to be between 7.5% and 9.5%, with projections for 2025 at 5.5% to 7.5%. By 2026, inflation is expected to stabilize within the 5-6% range, moving closer to the target threshold. However, risks to these forecasts persist, including uncertainties surrounding fiscal policy parameters and ongoing fiscal stimuli.
Additionally, the bank has revised its economic growth forecasts for Kazakhstan, predicting growth rates of 3.5%-4.5% for 2024 and 5.5%-6.5% for 2025. Factors driving economic growth include domestic demand dynamics, government initiatives, and increased oil production at Tengizchevroil (TCO). In 2026, economic growth is projected at 3.5%-4.5%, contingent upon various factors including oil price fluctuations.
Suleimenov emphasized that ongoing policy formulation efforts by the government to bolster economic growth may necessitate revisions to both inflation and GDP forecasts as these measures take effect. The National Bank remains focused on achieving economic stability and growth while navigating the dynamic landscape of global and domestic economic conditions.
