Kazakhstanis Expect Higher Inflation but Remain Optimistic About the Future

The share of Kazakhstanis expecting inflation to accelerate over the next year has increased, according to the National Bank’s regular survey. At the same time, optimism over the five-year outlook has edged up slightly, Orda.kz reports.

At the end of March, 34,2% of respondents said they expected inflation to speed up over the next 12 months, up from 27,4% in February. Another 46,8% said the rate of price growth would remain unchanged, compared with 49,5% a month earlier. At the same time, 7% said they expected inflation to slow over the next year, down from 8,9% in February. Another 2,2% said prices would not rise over the coming year, while 1,1% predicted they would decline.

More than half of respondents — 57,7% — could not say exactly how much prices would rise over the year. Uncertainty increased slightly from 56% in February. Another 11,6% said price growth would not exceed 20%, compared with 11,3% a month earlier. Some 10,5% expected inflation of 16–20%, while 9% expected prices to rise by 11–15%.

Over a five-year horizon, the picture improved slightly. The share of respondents who believe inflation will stand at 4–6% by 2031 rose from 7,2% to 8,2%. At the same time, the number of undecided respondents also increased, from 26% to 29,9%. In the remaining categories, the figures declined. Some 20,7% now expect inflation of 20% or more by 2031, down from 21,2%.

In March, annual inflation slowed to 11%, from 11,7% in February. The pace of price growth has now been easing for seven straight months, after reaching 12,9% in September. The National Bank has already said it may begin cutting the base rate, currently at 18%, in the second half of the year.

Inflation expectations among households and businesses are considered one of the main factors influencing inflation. Consumers, guided by their own perceptions, may either speed up or postpone purchases, thereby heating up or cooling demand.

Original author: Alexey Afonsky

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