Inflation in Kazakhstan continues to slow down

According to the Bureau of National Statistics, inflation in Kazakhstan reached 9.8% in December 2023. In 2022, the agency reported a record-high increase in prices of 20.3%.

In December 2023, prices increased by 0.8% versus 1% in November month on month. All key components of the overall consumer price index reported slower price increases. For instance, the cost of food products increased by 8.5% (vs 9.2% in November 2023), non-food products by 9.1% (9.9%) and services by 12.4% (12%).

In terms of price increases for food products, rice has become the champion with an increase of 34.3%, followed by mineral and table water (18.4%), preserved milk (16.9%), alcoholic beverages and tobacco products (15.6%) and kefir and eggs (3.4%).

Private use products reported a 12.4% price increase, furniture — 11.8%, dishware — 11.4%, clothes and footwear — 11.3%, medicines — 10.4% and construction materials — 7.3%. Businesses engaged in organizing complex recreation (16.8%), sanatoriums (15.8%) and health facilities (13.6%) have become leaders in the sphere of services. The cost of services in the field of sports increased by 13.5%, hair salons and entities for personal services by 12.8% and education by 9.6%.

The utility sector also reported a 33.2% increase in tariffs. For instance, cold water services experienced a price increase of 23.4%, hot water by 22%, sewage by 28.8%, electricity by 19.9%, heating by 26.1%, and house maintenance services by 7%.

The Karaganda region reported the highest price increase (11.1%), followed by the Akmola (10.7%) and Mangystau regions (10.6%). The Almaty region reported the lowest price increase (8.4%).

Against the backdrop of record-high inflation in 2022, the National Bank was stuck to the record-high base rate of 16.75% throughout most of 2023. The price increase started to cool down in March, while in August the regulator switched to softening its monetary policy. After a few days of this new course, Timur Suleimenov replaced Galymzhan Pirmatov as the head of the National Bank. The rate has declined on three occasions since then and is currently at 15.75%. This means that the decline was one percentage point per year.