Inflation Rate Hits Four-Year Peak in Kazakhstan

In July it reached 8.4%

According to Erbolat Dosaev, head of the National Bank of Kazakhstan, the current inflation rate is the highest since 2017. He made this statement during a cabinet meeting.

Due to ongoing imbalance on food markets, rising commodity prices, and high inflation in Russia and some of Kazakhstan’s other trading partners, the inflation in the country tends to grow faster and faster.

“The main contributor to the price surge is food inflation, which rose from 10.6% to 11.0% in July 2021 because of an unusual surge in vegetable prices in the middle of summer. The meat and vegetable oil prices are also surging,” Dosaev said.

The non-food inflation also rose from 6.9% to 7.2% because of an increase in gasoline prices. Inflation in terms of services has risen from 5.6% to 6.1% driven by utilities and other service prices surging.

“Based on the food, gasoline and electricity prices surge, as well as strengthening fiscal regulation we expect the inflation rate to be about 6-7% by the end of the year. We’ll publish an adjusted forecast in August-September this year,” Dosaev stated at the meeting of the cabinet.

As the minister noted, to stabilize prices and counter the inflation the National Bank decided on July 26 to raise the base rate by 25 points to 9.5%.

According to the Bureau of National Statistics of the Agency for Strategic Planning and Reforms of the Republic of Kazakhstan, food prices in July rose by 0.7% (7.3% from the beginning of the year), non-food prices by 0.5% (4.5%) and services by 0.8% (3.6%).
 

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