The Monetary Policy Committee of the National Bank of Kazakhstan has decided to keep the base rate at 18.0% per annum, with a corridor of plus or minus 1 percentage point. The decision reflects the regulator’s cautious stance as inflationary pressure in the economy remains elevated, DKNews.kz reports.
Inflation Meets Forecast, but Pressure Persists
At the end of 2025, inflation in Kazakhstan stood at 12.3%, in line with the National Bank’s forecast. However, the structure of price growth continues to raise concerns.
The largest contribution came from food inflation, which reached 13.5%. Sharp increases in meat and butter prices were driven by higher production costs and strong export demand.
Non-food inflation eased slightly to 11.1%, supported by the strengthening of the tenge in recent months. Price growth in paid services also slowed to 12.0%, largely due to administrative reductions in regulated utility tariffs.
Monthly Inflation Picked Up Again
In December 2025, monthly inflation accelerated to 0.9%. Core inflation, which reflects underlying price pressure, remained elevated at 0.8%.
According to the National Bank, inflation continues to form in an environment where stable domestic demand exceeds supply capacity. Secondary effects from tariff reform and fuel market liberalization are still feeding into prices and inflation expectations.
Inflation Expectations Remain High
Inflation expectations among the population for the year ahead increased to 14.7% and remain volatile. Expectations among professional market participants for 2026 inflation also rose, reaching 10.8%.
These figures indicate that confidence in a rapid slowdown of inflation has yet to take hold.
Global Environment Adds Uncertainty
Global food prices have declined slightly in recent months but remain elevated, especially for grains and sugar.
In Russia, inflation is slowing amid tight monetary conditions. In the European Union, inflation remains consistently low. In the United States, the Federal Reserve continues a gradual rate-cutting cycle, while warning of rising inflation risks linked to trade policy.
At the same time, growing geopolitical tensions are increasing uncertainty and could contribute to a higher global inflation backdrop.
Economic Growth Remains Strong
Despite inflationary pressure, Kazakhstan’s economy showed solid performance in 2025, growing by 6.5% year-on-year. High growth rates were recorded in transport, construction, trade, as well as in mining and manufacturing.
However, strong economic growth also adds to inflationary pressure, as demand continues to outpace supply.
Key Inflation Risks
The National Bank identifies several main pro-inflationary risks, most of them domestic:
- demand outpacing supply growth
- prolonged secondary effects from rising regulated prices and fuel costs
- uncertainty surrounding the scale and format of planned quasi-fiscal stimulus
- tax reform, including a VAT rate increase and expansion of the taxpayer base
- the adjustment period for businesses in the coming quarters
What Is Helping Contain Inflation
At the same time, a number of factors are working in favor of disinflation:
- moderately tight monetary conditions
- slower growth in unsecured consumer lending (issuance growth of 7.3% year-on-year over 11 months of 2025)
- reduction of excess liquidity through higher reserve requirements
- gold purchase mirroring operations
- strengthening of the tenge
How Long Will the Base Rate Stay High?
The National Bank notes that inflation dynamics and the balance of risks remain broadly in line with its forecasts. However, external challenges, uncertainty around the impact of tax reform, and the potential resumption of utility and fuel price growth from the second quarter of 2026 require a careful and prudent approach.
As a result, the regulator signals that the base rate is highly likely to remain at its current level until at least the end of the first half of 2026.
What Comes Next
The National Bank will continue to closely monitor price dynamics and assess the effectiveness of measures under:
- the Joint Action Program for Macroeconomic Stabilization and Welfare Growth for 2026–2028
- the set of measures aimed at controlling and reducing inflation
The next scheduled decision on the base rate will be announced on March 6, 2026, at 12:00 Astana time.
The Bottom Line
Keeping the base rate at 18% signals that the fight against inflation in Kazakhstan is not over. While the economy continues to grow, price pressure remains strong. For businesses and households, this means tight monetary conditions are here to stay, and cheaper borrowing is unlikely in the near term.
For now, price stability remains the National Bank’s top priority.
