Kazakhstan’s National Bank expected to hold base rate at 16.5%The National Bank of Kazakhstan is widely expected to keep its base rate unchanged at 16.5% at its June 5 meeting, according to analysts surveyed by Interfax-Kazakhstan. However, a modest hike of 25-30 basis points remains possible if inflationary pressures intensify.Monthly inflation slows despite annual riseAlthough annual inflation accelerated to 11.3% in May from 10.7% in April, monthly price growth decelerated to 0.9% from 1.2%, noted Daniyar Orazbayev, an analyst at Freedom Finance Global. "Seasonal factors, including rising fruit and vegetable prices and utility tariff adjustments, contributed to the increase. Given these trends and the typically subdued summer inflation period, the central bank is likely to maintain the current rate," Orazbayev said.The Analytical Center of the Kazakh Finance Association shares this view, stating that if price growth continues to slow, holding the base rate steady is the most probable outcome. The National Bank will also present updated macroeconomic forecasts during its meeting, which will shape future monetary policy decisions.Monetary policy needs time to address shocksBakbergen Toktasyn, a macroeconomist at BCC Invest, pointed out that May’s inflation data aligns with optimistic projections. Food prices rose by 9.6%, reflecting persistent inflationary pressures in the sector, while service costs surged by 16% year-on-year. He emphasized that service-driven inflation, particularly in utilities, healthcare, and entertainment, continues to fuel consumer and business expectations of further price hikes.Against this backdrop, Toktasyn expects the central bank to hold the base rate at 16.5%, allowing previous monetary tightening measures to take full effect. He also cited exchange rate volatility as a concern, noting that "while the tenge strengthened in mid-May due to seasonal export revenues, low oil prices remain a risk."No justification for rate cuts yetOlga Belenkaya, head of macroeconomic analysis at Finam, stated that the current 16.5% rate is likely to remain in place, as inflation remains well above the central bank’s target. She highlighted strong domestic demand as a key driver of Kazakhstan’s economic growth, which outpaces IMF and World Bank forecasts."External inflationary risks include uncertainty over U.S. trade policies, declining oil price projections, and rising global food prices. Domestically, high inflation expectations, further tariff hikes, and anticipated tax increases add to price pressures. The National Bank’s latest survey shows economists have raised their inflation forecasts for 2025–2027," she said.The central bank’s base rate decision will be announced on June 5 at 12:00 p.m. Astana time. (ICE ALMATY)

Fonte notizia: INTERFAX