Inflation gradually slows but remains elevated

KAZAKHSTAN - In Brief 01 Jun 2026 by Evgeny Gavrilenkov
According to the Bureau of National Statistics, in May, annual inflation eased to 10.4% from 10.6% in April, while monthly inflation slowed to 0.7% from 0.8%. Despite this moderation, inflation remains high, with the NBK keeping the base rate steady at 18.0%. Even the stronger tenge, which appreciated from around USD/KZT 550 in mid-2025 to below 490 now, has had only a modest impact on disinflation, suggesting the economy may still be overheated. Interestingly, despite the high base rate, household credit growth picked up in April to over 1.0% m-o-m after several months below that mark, last seen in November 2025. A full set of budget execution data was delayed last month, as the Finance Ministry released figures for the combined regional budget only. In 4M26, regional budgets spent just 29.8% of their annual plan, leaving KZT 3.1 trillion unallocated. Meanwhile, spending was revised up by about KZT 0.8 trillion to KZT 16.3 trillion. This suggests inflationary pressure is unlikely coming from the budget, with capital inflows possibly playing a major role in the current overheating.

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