The analytical center Halyk Finance has commented on the inflation dynamics in Kazakhstan, as reported by inbusiness.kz.
In January 2025, inflation accelerated to 8.9% year-on-year and 1.1% month-on-month, exceeding the historical average of 0.7%. The primary reason for the acceleration in inflation is the increase in the growth rate of prices for paid services. There is also an observed increase in the price growth rates within the food and non-food sectors. Rising inflationary pressure persists amid a weakening exchange rate, withdrawals from the National Fund, and escalating inflation expectations. Considering these risks, the National Bank maintained the base rate at 15.25% as of January 17.
"All key components of inflation for January were higher year-on-year. The main growth in inflation is driven by its non-food component. The inflation of paid services increased by 13.8% year-on-year (13.3% year-on-year in December). The price growth for non-food items accelerated from 8.3% year-on-year in December to 8.4% year-on-year in January, while food prices also increased by 5.8% year-on-year (5.5% year-on-year in December). In the structure of food products, a decrease in prices was observed for two items: sugar, which saw a reduction of 2% year-on-year, and eggs, which decreased by 3.1% year-on-year. The highest price growth in the food sector was recorded for oils and fats, fruits, and vegetables, each increasing by 8.8% year-on-year," writes analyst Saltanat Igenbekova.
Paid services continue to make the largest contribution to the acceleration of inflation in January (growth of 13.8% year-on-year), accounting for a significant portion of the overall price increase – 4.00 percentage points. The main driver of their growth is housing and communal services, where prices rose by 15.2% year-on-year, contributing 1.74 percentage points to the price increase. The most significant price hikes in January were observed for cold water – up 43.2% year-on-year (contribution – 0.21 percentage points), sewage – 26.1% year-on-year (contribution – 0.05 percentage points), central heating – 23.1% year-on-year (contribution – 0.16 percentage points), and hot water – 21.3% year-on-year (contribution – 0.05 percentage points).
The contribution of food and non-food items to the price increase was 2.39 percentage points and 2.47 percentage points, respectively, compared to the contribution of paid services (4.00 percentage points).
The depreciation of the exchange rate has intensified: the average USDKZT exchange rate in January was 524.64 tenge per dollar, compared to an average of 519.65 tenge per dollar in December 2024.
"The noticeable weakening of the tenge, combined with the negative inflationary landscape in external markets, may exert significant pressure on inflation in the near future," – analysts at Halyk Finance believe.