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Annual inflation continued to decelerate. In May 2026, annual inflation slowed from 10.6% (YoY) to 10.4% (YoY), supported by slower food price inflation and the high base effect from the previous year.
Household surveys point to persistent pro-inflationary sentiment. Perceived inflation stood at 11.9% (YoY), remaining traditionally above the official inflation estimate published by the Bureau of National Statistics. A substantial gap also persists between the long-term expectations of households and those of professional market participants – 14.6% versus 5.4%.
The base rate was reduced by 1 p. p. On June 5, 2026, the National Bank lowered the base rate from 18.0% to 17.0%. According to the statement by the Chairman of the National Bank of Kazakhstan, the decision was driven by the slowdown in inflation in April and May, as well as improved forecasts by the central bank.
The strengthening of the tenge, observed since October 2025, came to a halt in mid-May, after which the national currency shifted toward depreciation. The volume of foreign currency sales by the National Bank and quasi-public sector entities increased in May, which should have supported the tenge exchange rate. At the same time, the National Bank increased its purchases of foreign currency to maintain the foreign currency share of UAPF assets at the target level of 40% – up to USD 879 million, or 13.1% of trading volume – which partially offset the additional supply of foreign currency in the market.
AERC forecast. Inflationary factors remain mixed. On the one hand, the high base effect and external disinflation transmitted through the import channel may contribute to a further slowdown in inflation. On the other hand, rising regulated tariffs, the weakening of the tenge, and elevated inflation expectations continue to pose pro-inflationary risks. Under these conditions, according to AERC forecasts, annual inflation is expected to moderate gradually over the next three months: by August 2026, inflation is projected at 9.79% (YoY), with monthly price growth of 0.62% (MoM).
Kazakhstan’s international reserves increased. As of May 1, 2026, international reserves amounted to USD 67.5 billion, rising by 1.1% over the month and by 3.2% since the beginning of the year. The increase was largely driven by the rising value of gold holdings, which account for 78% of Kazakhstan’s reserve assets.
Despite the dominance of the retail segment in the banking sector’s loan portfolio, corporate lending is gaining importance in the dynamics of new loan issuance. Loans to households account for 58% of the total loan portfolio. At the same time, since the end of 2025, new loan issuance has been gradually shifting toward businesses: in May 2026, the corporate segment accounted for 56% of newly issued loans.
Read more in the Monetary Snapshot.
