National Bank of Kazakhstan Predicts Higher Inflation in 2025

The National Bank of Kazakhstan (NBK) has updated its forecasts for inflation and economic growth. Inflation in 2025 is expected to range between 6.5% and 8.5%, following a projected 8–9% in 2024. GDP growth for 2025 is forecasted at 4.5–5.5%. Key inflationary drivers include fiscal stimulus, rising utility tariffs, external inflationary pressures, and heightened domestic inflation expectations.

Key Indicators

Inflation Forecast:
- 2024: 8–9%.
- 2025: 6.5–8.5%.
GDP Growth:
- 2024: 4–4.5%.
- 2025: 4.5–5.5%.
- 2026: 4.6–5.6%.
- 2027: 3.3–5.3%.

Factors Influencing Inflation

Fiscal Stimulus: Increased government spending supports demand but adds inflationary pressure.
Rising Utility Tariffs: Higher costs for utilities remain a significant driver of price increases.
External Factors:
- Potential increases in global food prices.
- Inflation in Russia, impacting Kazakhstan through trade links.
Inflation Expectations: Public and business anticipation of rising prices contributes to sustained inflationary trends.

Prospects for Slowing Inflation

By the end of 2024, inflation may slow due to more restrained increases in utility tariffs.
However, the "Tariff for Investment" program may drive inflation in the service sector, heightening risks in early 2025.

Economic Growth Outlook

2024: GDP growth is projected at 4–4.5%.
2025: Growth is expected to reach 4.5–5.5% due to improving internal and external demand.
Long-Term Projections: GDP growth is forecasted at 4.6–5.6% in 2026 but may slow to 3.3–5.3% by 2027.

Conclusion

While the National Bank foresees steady economic growth, inflation remains a critical challenge. External factors such as global food prices and inflation in Russia will be significant hurdles for Kazakhstan in the coming years.