Smailov insists that reduction in inflation is due to cabinet’s work, not National Bank

Prime Minister of Kazakhstan Alikhan Smailov hasn’t agreed with the report to the cabinet by Berik Sholpankulov, deputy head of the National Bank. He emphasized that the reduction in inflation was a result of coordinated anti-inflation work by the cabinet, not the National Bank as Sholpankulov said.

What did Sholpankulov report about? During the cabinet meeting, Sholpankulov talked about the results of the social and economic development of the country over the period from January to September 2023. While delivering his speech, he noted that the National Bank has lowered the base rate and tightened the monetary policy.

«You said that the reduction in inflation was somehow connected with the high base rate last year. This is not true. The significant reduction in inflation became possible thanks to coordinated anti-inflation work by the cabinet,» Smailov pushed against Sholpankulov.

According to the deputy head of the regulator, the annual inflation has been decreasing for seven months in a row. Currently, it is at 11.8%.

What is the base rate in Kazakhstan now? In 2022, the base rate was at 16.75%, a record high for Kazakhstan. The rate was lowered twice since August 2023. In August, the National Bank lowered the rate from 16.75% to 16.5% and then to 16% on October 6.

In early September, the new chair of the bank Timur Suleymenov said that the rate could be lowered. At the time, he argued that the regulator should deal with inflation first because this is the most dangerous process for the economy. At the end of September, Minister of National Economy Alibek Kuantyrov recommended that the National Bank lower the key rate by 1 to 2 percentage points.

The regulator will announce its next decision on the key rate on November 25.