The National Bank anticipates high oil prices in the near future. This was stated today during a press conference by the chairman of the monetary regulator, Timur Suleimenov, as reported by a correspondent from the business information center Kapital.kz.
“Brent oil prices surpassed $80 per barrel in early January, reaching a four-month high. The price increase is linked to new U.S. sanctions against Russia, which have raised concerns about supply disruptions, a decline in oil reserves in the U.S., and potential tightening of sanctions against Iran. These factors, along with OPEC+ production restrictions and geopolitical tensions, will support high prices in the near term,” he noted.
According to him, external inflationary pressure remains, reflecting the situation in global food markets and high inflation in Russia, our major trading partner.
“Despite a decrease in the FAO Food Price Index in December 2024, food price dynamics remain 6.7% higher than in 2023. In developed economies, inflation, after a period of slowdown, has shown moderate growth in recent months, increasing uncertainty regarding global monetary conditions. In the EU, inflation accelerated to 2.5% in November, while in the U.S., it reached 2.9% in December, marking a third consecutive month of growth,” Timur Suleimenov clarified.
At the same time, both regulators, despite recent policy easing, maintain a cautious approach, emphasizing their readiness to adapt their decisions to changing economic conditions. Moreover, the Federal Reserve has already revised its forecasts, expecting a higher level of rates compared to September estimates.
“In Russia, inflation continues to accelerate, reaching 9.5% in December 2024. Under these conditions, the Central Bank of Russia maintained the key rate, emphasizing the importance of sustaining tight monetary conditions for price stabilization. The regulator noted that the normalization of fiscal policy will be a key factor in ensuring a sustainable decline in inflation. According to forecasts, a return to the target inflation level of 4% in Russia is expected by 2026,” the head of the National Bank emphasized.
Speaking about trends in the domestic economy, he noted that the growth of the short-term economic indicator for 2024 shows a confident acceleration, reaching 6.2%.
“Domestic demand remains the main driver of economic growth; however, its pace continues to outstrip the production capacity of the economy. This creates risks of intensified price pressure and indicates signs of an overheated economy. Active fiscal policy and the expansion of consumer lending stimulate consumption. Investment activity in the non-resource sector also significantly contributes to supporting domestic demand, enhancing business activity,” he specified.
The Business Activity Index (BAI), monitored by the National Bank, has remained in positive territory for 11 consecutive months, reflecting businesses' confidence in the stability of the business environment.
“In December 2024, the index stood at 50.7, indicating ongoing expansion in business activity. The most pronounced growth is observed in construction, driven by an increase in new orders and employment levels. Meanwhile, in the mining sector, the index fell to 48.8,” Timur Suleimenov highlighted.