Kazakhstan: Inflation ends 2015 at the highest level in over seven years
January 5, 2016
Consumer prices in Kazakhstan rose 1.2% in December over the previous month, which came in below 3.7% increase tallied in November. The monthly moderation reflected a slower increase in prices for nearly all items. The monthly increase in December was the softest since October, when consumer prices began to feel the effects of the devaluation of the tenge.
Inflation jumped from 12.8% in November to 13.6% in December, and thus advanced to levels last registered in October 2008. As a result, inflation remains well above the National Bank of Kazakhstan inflation target established in September 2015. Under the new inflation targeting regime, the Central bank established an inflation target corridor of between 6.0% and 8.0% for the medium term.
Inflation is likely to continue rising in the coming months, mainly due higher prices for imported goods as a result of the devaluation of the national currency. However, as domestic demand is expected to weaken going forward, this should dampen inflationary pressures and bring inflation down the Central bank’s target in the medium term.
Author: Ricardo Aceves, Senior Economist