Kazakhstan macro: The NBK cut the base rate and upgraded its growth forecast

KAZAKHSTAN - Forecast 18 Jun 2026 by Evgeny Gavrilenkov

Recently, several organizations released updated forecasts for Kazakhstan’s economy in 2026, and the outlook is looking a bit brighter than a few months ago. The economy is steadily moving toward a more balanced growth path while easing past overheating caused by heavy budget spending and rapid household credit growth, with foreign direct investment inflows also having contributed to that overheating.

With disinflation underway, the NBK recently cut the base rate by 100 bps to 17.0%, which remains high in real terms as inflation in May dropped to 0.7% m-o-m and 10.4% y-o-y. Still, the NBK gave no hints about further cuts, citing persistently high inflation expectations (recently 12.4%-12.7%) and global inflation risks. In its most recent monetary policy report, the regulator lowered its 2026 inflation forecast to 9.0%-11.0%, noting that the VAT hike had less impact than expected and that the tenge’s appreciation helped ease price pressures. The NBK’s 2026 inflation forecast is generally in line with market expectations of around 10%, and by 2027, it expects inflation to drop to between 5.5% and 7.5%. Inflation trends will also depend on budget policy. We believe the government won’t increase expenditures this year as much as in previous years. We also expect the 2027 budget to remain relatively conservative on spending, and think inflation could drop to single digits next year, even with a possible (and welcome) weakening of the tenge.

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