National Bank Worsens Kazakhstan's Economic Growth Outlook

The National Bank of Kazakhstan has published its latest report on monetary policy. The regulator revised its projections for the country's economic growth and inflation rate, Orda.kz reports.

The National Bank estimates that the inflation rate by the end of 2024 will be 8-9 percent; three months earlier, it was 7.5–9.5%.

Analysts believe inflation will be 6.5 to 8.5% (base forecast) in 2025. Kazakhstan will, at best, achieve the target of five percent inflation by 2027.

As in this year, inflation in 2025 will likely be driven up by increases in utility rates.

The Tariff in Exchange for Investments program, provided that the current rate of increase in utility tariffs is maintained, will remain the key driver of accelerating inflation in the services sector,  the National Bank analysts emphasize.

Read also:

• Tariff Increase: Experts on Inflation in Kazakhstan

Another factor is the uncertainty surrounding covering the budget deficit. 

The government has yet to devise a solution amid a significant tax shortfall. Due to the ongoing tax legislation reform, there is even less certainty about the 2026 budget parameters.

The economic growth outlook has also been revised downwards. The National Bank assumes that in 2024, the country's GDP will grow by 4-4.5%, in 2025 - from 4.5 to 5.5%, and in 2026 - from 4.6 to 5.6%. For comparison, the regulator predicted growth of 4.9-5.9% for 2025-2026 in August.

The National Bank's expectations are primarily linked to oil prices, which could fall to $70 per barrel next year (the average price level for 2024 is estimated at $80.3 per barrel).

Oil could even fall to $50. Meanwhile, the regulator assumes that grain prices will continue to rise in 2025.

Original Author: Nikita Drobny