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3 февраля 2025
Dmitriy Mazorenko.

Inflation in Kazakhstan Expected to Jump by Year End

Prices grew 8.9% in January, indicating a worsening economic situation

Inflation in Kazakhstan Expected to Jump by Year End

Kazakhstan’s annual inflation resumed to grow in January, despite the Central Bank keeping interest rates high for years, the Statistics Committee reported on February, 3.

Annual inflation in the country reached 8.9% in January 2025, up from 8.6% in December 2024. Service prices, which rose by 13.8%, were the largest component of the inflation increase.

In December, the Central Bank stated that it expects inflation to be between 6.5% – 8.5% in 2025, higher than previously forecasted. The government’s fiscal stimulus will continue to keep pressure on inflation, along with the reform of residential community services, and the depreciation of the Kazakhstani tenge against the US dollar.

The regulator has kept interest rates above 13% since February 2022 in hopes of slowing down price growth.

The government, on its part, has announced a gradual deregulation of fuel prices starting in February and further tariff increases, which will contribute to price growth.

Last week, Kazakhstan’s government also announced a set of measures to increase the value-added tax from 2026, in an effort to address the ongoing budget crisis.

Experts say this will provoke an inflation hike, because VAT is attached to the sale of goods. They also anticipate a significant decrease of people’s purchasing power because employers are poised to struggle to keep salaries at the current level.

President Kassym-Jomart Tokayev said that the Central Bank must find a way to restrain inflation, while also pushing it to cooperate with the government in implementing fiscal reforms.

Economy minister Serik Zhumangarin, in charge of the wave of reforms, stated on February 1 that there will be no increase in social tension after prices go up.

“We lived through inflation at 23%. Did anything happen? No. We survived through inflation at 17%. We are still living through [high inflation]. But nothing is happening,” Zhumangarin told the press.