High Inflation Prompts Government to Temporarily "Freeze" Utility Rate Hikes

The government acknowledges that utility rate hikes remain inevitable, Orda.kz reports.

In the first half of the year, Kazakhstan recorded a slowdown in food inflation.

However, overall prices continue to rise, largely driven by a sharp increase in the cost of paid services. Speaking at a government meeting, First Vice Minister of Trade Aizhan Bizhanova noted that in June, the price index for socially significant goods dropped to 0.7%, down from 1% in May and 1.6% in April.

Over the past week, prices rose by just 0.1%. For the third consecutive month, the cost of potatoes has declined (-1.3%), followed by carrots (-0.9%). Prices for rice, buckwheat, eggs, flour, and pasta are also falling, while bread and milk prices have remained stable.

The reduction in product prices is due to the start of the mass harvest season and increased domestic production. Output of sugar, vegetable oil, butter, flour, fermented milk products, and milk has grown,the government said in a statement. 

At the same time, paid services have become the main driver of inflation, growing by 16.1% in the first half of the year. To ease the burden on consumers, the government has decided to delay planned utility tariff hikes, postponing them at least in part to a later date.

This is a temporary measure aimed at stabilizing inflation and protecting citizens’ incomes,the Cabinet of Ministers explained. 

Previously, it was reported that inflation in Kazakhstan reached 11.8% in June, with the highest rates observed in Almaty, the Qaraganda region, and Astana.

Earlier, National Bank Head Timur Suleimenov stated that inflation is driven not only by domestic factors but also global ones, including geopolitical instability, trade restrictions, falling oil prices, and increased consumer lending.

Original Author: Ruslan Loginov