AERC says that inflation may slow down more than expected

The consumer price index, the main inflation indicator in Kazakhstan, is going to be at 14.7% in June, which is lower than the previous forecast of 15.2% year on year (0.57% vs 0.7% month on month), according to Applied Economic Research Center (AERC).

«This slight decrease in assessment is driven by factual results in May, which turned out to be lower than the previous assessment by AERC, and stable decline in inflation over the past three months in a row,» the survey said.

At the time, AERC forecast a price surge in May at 16.23% year on year and 0.9% month on month. However, according to the Bureau of National Statistics, the inflation rate slowed in May to 15.9% year on year or 0.6% month on month. The high base effect of the last year was the main factor that influenced the decline in inflation, the agency said.

In July, inflation is expected to slow down to 14.38% year on year and to 0.82% month on month. The previous forecast by AERC was slightly higher at 14.98% and 0.9%, respectively. As a result, inflation is going to be at 13.57% in August, AERC said, citing data for June and July.

«It is worth noting that AERC is forecasting some increase in monthly inflation in July and August compared to previous months due to a surge in utility prices, which is expected to happen in July this year,» the organization’s experts explained.

According to the International Monetary Fund, the inflation rate is declining from 20% in 2020 to

12% in 2023. In turn, the National Bank of Kazakhstan is expecting that the price increase will lower to 9% to 12% in 2023, 6% to 8% in 2024 and 4% to 6% in 2025.