National Bank of Kazakhstan raises 2024 GDP growth forecast to 4-4.5%, inflation to 8-9%

ALMATY. Nov 29 (Interfax) - The National Bank of Kazakhstan has updated its inflation and GDP growth projections for 2024, the regulator said in a statement.

The forecast for Kazakhstan's economic growth in 2024 has been improved to 4-4.5%, from the 3.5-4% projected in August. Projections for 2025 have been revised from 5-6% to 4.5-5.5%, and for 2026, from 4.9-5.9% to 4.6-5.6%.

"The inflation forecast for 2024 has been adjusted to 8-9%. The forecast for 2025 has been revised upward to 6.5-8.5%, and for 2026 to 5.5-7.5%. However, core inflation is expected to stabilize near 5% by 2026, with total inflation expected to align with the target by 2027," the National Bank said.

In August 2024, the regulator had projected inflation at 7.5% for 2024, 9.5% for 2025, and 5-7% for 2026.

"The higher inflation estimates for the coming years are driven by expanded fiscal stimulus, ongoing reforms in the housing and utility sectors, a weakening exchange rate, and increased external inflationary pressures. Inflation risks stem from rising domestic demand, accelerating external inflation, and growing inflation expectations," the regulator said.

The National Bank also noted ongoing "uncertainty regarding the tools for stabilizing public finances."

"Further liberalization of regulated prices and tariffs, along with their pace and timing, also pose significant risks to the forecast. Lower projections are attributed to declining oil prices and moderate external demand. The National Bank estimates that, over the forecast period, the economy will grow in an environment where demand outpaces domestic supply, creating sustained inflationary pressure," it said.