Annual consumer price index (CPI) inflation in Kazakhstan stood at 7.2% in May, according to data published by the country’s statistics office.
The figure is in line with the inflation rate registered in 2020, namely 7.5%. The regulator was previously aiming to achieve a 4% inflation rate in 2020, but consumer prices moved away from the upper boundary of the 4-6% inflation corridor that the central bank was maintaining. Inflation officially surpassed the 6% boundary in March 2020 and continued to rise due to the effects of the global coronavirus (COVID-19) pandemic, but it has started slowing in the first quarter of 2021.
Annual food inflation slowed to 9.3% in May, down from 9.8% in April. Non-food inflation stood at 6.7% in May, up from 6.4% in the previous month.
Inflation in prices of services registered at 5.1% in May.
“The base effects from 2020 have started to weigh on prices, especially in the food segment, which is most susceptible to FX passthrough pressures. Going forward, we expect inflation to moderate closer to the upper bound of NBK’s targeted range (4-6% YoY),” the analytical arm of UK-based broker SOVA Capital said in a note. “We think NBK is unlikely to start normalizing its policy stance in 2021, as elevated food-price pressures and COVID-19, not to mention the geopolitical risks coming from Russia, could reverse the recovery course, bringing oil prices down and leading to supply disruptions.”