National Bank of Kazakhstan Increases Base Rate Amid Inflation Concerns

The National Bank of Kazakhstan has raised its base rate to 16.5% to address economic uncertainties. Analyst Rassul Rysmambetov attributes this increase to concerns over tariffs, a planned VAT hike, and global economic tensions. He emphasizes the need for the government to review economic strategies to navigate the ongoing challenges.

The National Bank of Kazakhstan (NBK) has implemented an increase in the base rate from 15.25% to 16.5%, marking an unprecedented rise of 1.25 percentage points in response to escalating economic uncertainty. This decision indicates a proactive approach amidst concerns regarding inflationary pressures due to rising tariffs and proposed tax changes.

Analyst Rassul Rysmambetov emphasized that the rate change is a precautionary measure fueled by several factors: fluctuations in U.S. policies which may influence Kazakhstan’s budget, the decree on economic liberalization signed by President Kassym-Jomart Tokayev last May, and the government’s proposal to raise VAT, which has intensified inflation expectations.

Rysmambetov remarked that without the significant pressures from oil prices and VAT-related inflation expectations, the economic landscape could have been considerably more stable. Furthermore, he pointed out that the ongoing global tariff conflict involving major economies poses significant challenges for Kazakhstan as an oil-exporting country.

He noted, “The tariff war between the US, Europe, Canada, Mexico, and China is a global change that we feel as part of the global economy. We have witnessed the beginning of a global tariff war. As an oil-producing state, we will definitely feel all its consequences.” Rysmambetov advocated for a reevaluation of certain economic plans to navigate these complexities effectively.

In summary, the National Bank of Kazakhstan’s decision to raise the base rate to 16.5% reflects a proactive strategy to combat inflation amidst various economic challenges. Influenced by both domestic policy changes and global economic tensions, this measure aims to mitigate the risks posed by rising tariffs and fiscal adjustments. Rassul Rysmambetov’s analysis underscores the intricate relationship between Kazakhstan’s economy and global market dynamics, advocating for adaptive strategies moving forward.

Original Source: astanatimes.com