Inflation in Kazakhstan in January: analysts forecast 8.4–8.9% rise year-on-yearInflation in Kazakhstan is expected to remain elevated in January 2025, with analysts forecasting an annual rate of 8.4%-8.9%, according to a recent report by Interfax-Kazakhstan. Monthly price increases are projected to range between 0.7%-1%, reflecting ongoing pressures on consumer prices.In December 2024, annual inflation stood at 8.6%, up slightly from 8.4% in November. Monthly inflation remained steady at 0.9%, mirroring the previous month’s trend.The Association of Financiers of Kazakhstan (AFK) predicts annual inflation in January will range between 8.4%-8.8%, with monthly inflation at 0.7%-1%. According to AFK, domestic factors are the primary drivers of inflation.“Among the internal factors negatively affecting inflation in Kazakhstan, we continue to see stimulative fiscal policies, the impact of the tenge’s depreciation (especially in the first three months after weakening), ongoing utility sector reforms, high consumer demand, and rising inflation expectations,” the AFK stated in a report.The association also noted that external factors, such as global oil prices and food price trends, have had a mixed impact. While oil prices rose to $78.2 per barrel in January, the FAO Food Price Index declined slightly, offering some relief.The Analytical Credit Rating Agency (ACRA) offers a slightly more optimistic view, expecting annual inflation to slow to 8.5% or remain at 8.6%. Monthly inflation, however, could drop to 0.8%, according to Zhannur Ashigali, Director of Sovereign and Regional Ratings at ACRA.“Annual inflation continues to exceed the central bank’s target of 5%, and under the most optimistic forecasts, it will only reach this level by the second half of 2026,” Ashigali said.He also highlighted the broader inflationary environment, noting that “the overall pro-inflationary backdrop in the external environment, including in the Russian economy and global food inflation, continues to support current price growth trends.”Ashigali added that domestic factors, such as rising tariffs and the lingering effects of last year’s currency depreciation, are also playing a significant role. “The impact of last year’s exchange rate adjustments will become more apparent by the end of the first quarter,” he explained.Olga Belenkaya, Head of Macroeconomic Analysis at Finam, expects annual inflation in January to range between 8.6%-8.7%, with monthly inflation at 0.8%-0.9%.Inflationary pressure in recent months has been most noticeable in food prices. "Additionally, utility tariffs are set to rise, and mobile operators have already announced higher prices for services. The weakening of the tenge against the dollar, which has lost about 8% of its value over the past three months, is also a pro-inflationary factor,” Belenkaya said.She also noted that January’s monthly inflation is in line with historical trends, averaging 0.8% over the past decade.Freedom Finance Global takes a more pessimistic view, projecting annual inflation to accelerate to 8.9% in January. Daniyar Orazbayev, an analyst at the firm, pointed to rising food prices as the primary driver.“In our view, annual inflation in January will accelerate from 8.6% to 8.9%. The main reason for this will be food prices, which are already showing significant increases,” Orazbayev said.He highlighted sharp price hikes for staples like potatoes, cabbage, and vegetable oil. “Food staples rose by 1.2% in the first 21 days of January, compared to just 0.2% during the same period last year. Non-food inflation is also likely to remain elevated due to the stronger dollar,” he added.Orazbayev also noted that inflation in services, which has been adjusting to earlier spikes in goods prices, remains high at 13.3%.Despite the current pressures, the National Bank of Kazakhstan remains cautiously optimistic. Under its baseline scenario, inflation is expected to moderate to 6.5%-8.5% in 2025 and further ease to 5.5%-7.5% in 2026. However, reaching the central bank’s target of 5% may take until the second half of 2026. (ICE ALMATY)

Fonte notizia: INTERFAX