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Annual inflation continued to decelerate in March. At the same time, signs of disinflation have also begun to emerge in monthly inflation trends. Core inflation confirms the presence of a downward trend. However, the current slowdown in the annual rate is partly due to the high base effect from last year.
Inflation expectations remained volatile and elevated in March. Key indicators continue to point to persistent pro-inflationary sentiment and high uncertainty among respondents. Meanwhile, the projections of professional market participants diverge from population expectations, and this gap is widening for long-term expectations.
The tenge is strengthening against the U.S. dollar. This appreciation has been accompanied by an increase in foreign currency sales by quasi-state companies.
AERC forecast. Inflationary factors are controversial. On the one hand, positive signals come from the strengthening of the national currency, the declared reduction in the fiscal impulse, and a slight moderation of inflation in Russia. On the other hand, disruptions in global logistics are contributing to rising global food inflation and higher prices for oil, gas, nitrogen fertilizers, and helium.
Kazakhstan’s international reserves continue to grow. The portfolio structure shows declining diversification and increasing dominance of a single asset class.
Credit market. In the structure of total outstanding loans, household lending continues to dominate, although monthly loan disbursements show a slight predominance of lending to businesses.
Read more in the Monetary Snapshot.
