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ASTANA – Kazakhstan’s National Bank has lowered its base rate to 15.75% from its previous level, citing a continued decline in annual inflation and easing inflation expectations.
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The Monetary Policy Committee announced the decision on Oct. 23, setting the rate corridor at plus or minus one percentage point around the base rate.
“Annual inflation fell for the 12th consecutive month, reaching 9.3% in September, supported by moderately tight monetary policy and favorable exchange rate dynamics,” the National Bank’s Governor Timur Suleimenov said in his statement.
According to him, food inflation declined to 8.5% from 9.5%, reflecting lower fruit and vegetable prices and slower growth in meat prices. Non-food inflation eased to 11% from 11.4%, partly due to slower increases in fuel and lubricant prices. Services inflation remained at 8.9%, with prices for unregulated services continuing to rise rapidly.
Monthly inflation remained at 0.6% in September, unchanged from August. After seasonal adjustment, it slowed to 0.7% from 0.9%. The median of seasonally adjusted core inflation estimates remained at 0.7%, indicating that price pressures persist.
Inflation expectations for the next 12 months fell to 11.8% in September from 12.1% in August. Market professionals also lowered their inflation forecasts for the end of 2026 to 9.5% from 10%, and for 2027 to 8.3% from 8.5%.
Economic growth and inflation risks
Kazakhstan’s economy continued to expand, with gross domestic product growing 4.2% in January-September 2026, driven by non-resource sectors, particularly construction, manufacturing and transport.
Fixed-capital investment increased 7% over the period, while investment in the non-resource sector, excluding budget funds, rose 25%.
“Although consumer spending growth has moderated compared with the previous year, fiscal and quasi-fiscal stimulus, alongside strong investment activity, continues to support elevated domestic demand,” Suleimenov said.
External conditions remain inflationary. Tensions in the Middle East are sustaining high global energy prices, while the United Nations Food and Agriculture Organization’s food price index rose 1.5% in September to 136 points, up 5.8% year on year. Higher prices for cereals, sugar and vegetable oils contributed to the increase amid unfavorable weather and logistical constraints.
The National Bank also pointed to tighter global monetary conditions. According to its statement, the European Central Bank raised rates for the second time this year, while the United States Federal Reserve raised rates for the first time since 2023. Russia’s central bank kept its key rate unchanged, pausing its easing cycle amid stronger price pressures.
Domestic inflation risks include fiscal and quasi-fiscal stimulus, elevated inflation expectations, fuel prices and regulated utility tariffs. External risks stem from high global energy and food prices, rising inflation in Kazakhstan’s trading partners and tighter global financial conditions.
Rate outlook
The National Bank said the continued decline in annual inflation and inflation expectations had created room to lower the base rate. However, the decision maintains moderately tight monetary conditions to sustain disinflation and return inflation to the 5% target in 2028.
The bank warned that annual inflation could accelerate somewhat toward the end of 2026 because of a base effect related to regulated tariffs. A moratorium on utility tariff increases was in effect from October 2025 through the end of March 2026, following a 14% reduction in utility tariffs in the fourth quarter of 2025.
Given the current balance of risks, the National Bank considers the likelihood of another base rate change before the end of 2026 to be low. Further rate cuts will depend on sustained evidence that price pressures are easing.
The next scheduled base rate decision will be announced on Dec. 4.
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