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Kazakhstan Inflation in January 2022

Обновлено: 28 февр. 2022 г.

In January, consumer inflation accelerated to 0.7% m/m (0.6% m/m in December) due to an increase in the cost of food products and paid services. At the same time, the growth rate of prices of non-food products has slowed down significantly as a result of the measures taken by state regulation.

The annual inflation rate was at the level of 8.5%, which was also facilitated by the "low base" of last year. Government regulation measures already have a noticeable impact on pricing in the country, especially on energy prices, the change in which directly affects the rate of inflation. In addition, the operational measures of the PBOC stabilized the tenge exchange rate, which in turn should also affect the further slowdown in inflation. According to the Bureau for National Statistics, the rate of consumer inflation in January slightly accelerated to 0.7% m/m compared to 0.6% m/m in December 2021 In January, the consumer price index in annual terms increased slightly and amounted to 8.5% (8.4% yoy in December 2021). At the same time, the rate of consumer inflation since July 2021 has invariably remained above 8%, which is the highest figure over the past five years. The dynamics of growth in prices for food (9.9% yoy) and non-food products (8.5% yoy) did not change compared to the previous month. Paid services rose in price by 6.8% yoy (6.5% yoy in December 2021).

Source: Republic of Kazakhstan Agency of Statistics

Prices for food products in January increased by 1.0% m/m, providing a 0.4pp contribution to the overall indicator of consumer inflation. In particular, such food products as fruits and vegetables (+4.3% m/m), cereals (+1.2% m/m), bread (+0.6% m/m) and sugar (+0.6% m/m) rose in price. At the same time, prices for cottage cheese (-0.6% mom) and eggs (-0.6% mom) decreased. Prices for non-food products in January increased by 0.3% m/m, providing a 0.1pp contribution to the overall indicator of consumer inflation. Detergents and cleaning products (+0.8% mom), pharmaceutical products (+0.8% mom) and personal goods (+0.7% mom) went up in price. The price of liquefied gas (in cylinders) decreased by 22.7% m/m, diesel fuel by 1.3% m/m, and gasoline by 0.1% m/m. Consumer inflation rate Source: BNS 7.5 7.4 7.4 7.0 7.0 7.2 7.9 8.4 8.7 8.9 8.9 8.7 8.4 8.5 0 2 4 6 8 8 8 10 12 Dec/20 Jan/21 Feb/21 Mar/21 Apr/21 May/21 Jun/21 Jul/21 Aug/21 Sep/21 Oct/21 Nov/21 Dec/ 21 Jan/22 % YoY CPI Food Non-Food Services Inflation in January 2022 February 2, 2022 Inflation in January 2022 2 In paid services, prices increased by 0.6% m/m, and their contribution to the overall price increase in January was 0.2pp. The cost of renting housing (+3.7% m/m), outpatient services (+0.7% m/m) and housing maintenance (+0.3% m/m) increased markedly.

Despite some acceleration, the monthly inflation rate in January was at a relatively low level and noticeably below the level of 0.9% -1.1% m/m in the first half of 2021 The annual level of consumer inflation (8.5%) is also below the figure of 8.9% in September and October 2021. while the growth in the cost of non-food products, on the contrary, slowed down. The slowdown in the growth rate of prices for non-food products was due to the cheapening of diesel fuel. The decrease in fuel prices was due to the saturation of the market due to domestic supplies, as well as the introduction of marginal prices. Recall that in the autumn of 2021, there was a shortage of this type of fuel on the market, and the price for it over the past 3 months of last year increased immediately by 30.5%. The decline in prices for liquefied gas, the cost of which also increased sharply at the end of last year, followed due to state regulation in this market segment. State regulation of prices in combination with the tight monetary policy of the PBOC, expressed in support of the national currency exchange rate and raising the base rate immediately by 50bp to 10.25% will contribute to a further decrease in both the rate of actual inflation and inflation expectations of the population in the first half of this year. The combination of these measures, in our opinion, is likely to lead to a slowdown in annual inflation to below 8% starting from the second quarter of this year.

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