National Bank Signals Base Rate to Remain Unchanged Through 2025

The National Bank of Kazakhstan does not intend to lower the base interest rate before the end of 2025, reports Orda.kz.

Chair of the National Bank Timur Suleimenov stated:

Keeping the rate at exactly 16.5 percent is quite difficult. If we talk about our forecasts, they show that the base rate should be maintained at least at this level throughout 2025. It is clear that these are forecasts, these are model practices, and many things will change both within our country's economy and outside — in external macroeconomic conditions. But for now, based on the forecast round that ended today, it is assumed that the base rate will be at this level throughout 2025 — or more conservative. 

On June 5, the National Bank announced its decision to maintain the base rate at 16.5%. As of the end of May, annual inflation in Kazakhstan was 11.3%, primarily driven by rising service costs.

This includes both state-regulated rates, such as for utilities, and market-based services, such as hairdressing and car repair.

Food prices have also accelerated. In May, prices rose by 0.9%, exceeding the typical monthly increase for this period. Core inflation, which excludes seasonal factors, is currently estimated at 10–11%.

Underlying inflationary pressure remains. Consumer spending has increased, production costs for businesses have risen, and government spending continues to support economic activity. Inflation expectations among the population also increased, reaching 14.1% in May, up from 12.2% in April.

External factors are also contributing to domestic price pressures:

• Inflation remains elevated in Russia
  
• Global food prices are rising
  
• Exchange rates are volatile
  
• Trade tensions are escalating
  
• Raw material prices are unstable

Original Author: Ilya Astakhov