Kazakhstan: Under the Hood of Disinflation

Research evidence excerpt

Kazakhstan: Under the Hood of Disinflation

n remains stickier than goods

inflation, we estimate that about 5.2 percentage points came inflation and continues to signal residual domestic

from food and beverages (including alcoholic beverages). demand pressures.

• Quasi-fiscal risks have shifted from Baiterek to Figure 2: Food and non-alcoholic beverages Serbia

Samruk-Kazyna: Baiterek’s net demand impulse is weight in the basket Georgia

likely to be negative in 2026, while Samruk’s invest- 50.0 Kazakhstan

ment agenda could provide a KZT 2.5 trn boost. 40.0

• The June 100 bp cut appears justified by improved 30.0

realized inflation dynamics, but sustaining disinflation

will likely require real interest rates to remain restric- 20.0

tive for longer. 10.0

• As the tenge enters its seasonally weaker period, disin- 0.0

flation will become sensitive to the exchange rate 18 19 20 21 22 23 24 25 26

dynamics. As such, NBK’s gold mirroring operations Source: Haver, J.P. Morgan

could offset such pressures.

To better capture volatility, we split food into processed and

Recent investor conversations on Kazakhstan have rightly unprocessed categories. In our definition, unprocessed food

focused on whether the disinflation process is sustainable fol- includes fruits and vegetables; eggs; beef, horse, pork, sheep,

lowing repeated inflation reversals in recent years. In this and poultry; and fresh and frozen fish. Excluding processed

note, we highlight the trends that have shaped our view of meat products, we estimate that volatile unprocessed food

Kazakhstan’s inflation dynamics. represents about 17% of the CPI basket.

Analyzing inflation in Kazakhstan is inherently challenging— Food inflation momentum—both processed and unpro-