Inflation in July slows m-o-m and rises y-o-y

KAZAKHSTAN - In Brief 02 Aug 2022 by Alexander Kudrin

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PAGE BREAK Kazakhstan’s Bureau of national statistics reported that inflation m-o-m slowed to 1.1% from 1.6% in June and 1.4% in May, but in y-o-y terms, inflation increased by 15.0%, prompting the National bank to raise its base rate. Inflation YTD reached 11.7%. In the food segment, inflation in July slowed to 1.0% m-o-m (from 1.9% in June). Even though the non-food inflation also slowed m-o-m but moderately – to 1.5% (compared to the same 1.9% in June). It looks as though the amended budgetary spending will continue to stimulate domestic consumption, albeit excessively, which will translate into a continuous rise in inflation y-o-y. Inflation m-o-m can slow further in August, and likely be below 1.0%. Recall that in July 2021, monthly inflation was at 0.7%, and in August 2021, it decelerated to 0.5% due to seasonal factors. It decelerated further in September last year (to 0.4% m-o-m) before bouncing back in October to 0.7%. In the next few months, monthly inflation will likely be higher than a year ago; hence inflation y-o-y will continue rising amid moderating m-o-m inflation. Evgeny Gavrilenkov Alexander Kudrin