At a cabinet meeting on Tuesday, two weeks before the next policy rate review, the governor of the national bank of Kazakhstan Galymzhan Pirmatov stated that more ‘monetary tightening’ was necessary due to the nation’s continuing monthly inflation, Reuters reports.
Increased government expenditure, supply chain problems, and the weakening of the national currency against the Russian rouble all contributed to Kazakhstan’s annual inflation surging to a 14-year high of 17.7% in September.
“In September, inflation rose further to 17.7 percent, well above the 4–6 percent target range of the National Bank of Kazakhstan (NBK), driven by both external factors and domestic demand,” said the International Monetary Fund (IMF) in a report.
According to Pirmatov, the influx of thousands of Russians escaping a compulsory army enrollment has also contributed to an increase in consumer costs.
On October 26, the national bank of Kazakhstan will review its monetary policy. It maintained the benchmark rate of 14.5% last month.
“Inflation would peak around 17 percent in early 2023 and remain above 6 percent until 2024,” IMF’s report read.
According to Pirmatov, “the persistence of high inflation against the background of fiscal stimulus and strengthening demand in the economy, with external shocks also taken into account, requires further monetary policy tightening.”
