BAKU, Azerbaijan, January 26. Netherlands-based ING Group expects inflation in Kazakhstan to trend toward the upper end of the National Bank of Kazakhstan’s (NBK) official forecast range of 9.5-12.5% year-on-year by the end of 2026, TurkicWorld reports via ING.
According to ING, Kazakhstan’s benchmark interest rate is likely to remain at 18% through mid-2026. However, it does not rule out a temporary rate hike in March or April if inflation accelerates toward 14-15% year-on-year in the coming months.
ING analysts point to several upside risks to inflation that they say are not fully reflected in the NBK's baseline outlook. These include the lingering inflationary impact of expansionary fiscal policy in 2025, marked by a state budget deficit of around 2.7% of GDP, as well as inflation spillovers from Russia following a sharp rise in Russian consumer prices after a VAT increase.
Currency dynamics also pose risks, ING said, noting that the disinflationary effect of the tenge’s recent appreciation is likely to fade. The Group's baseline scenario assumes the exchange rate will weaken to 530-560 tenge per U.S. dollar later this year, from around 500-510 currently, as fuel export flows ease after a strong 2025. Additional pressure could emerge if foreign exchange sales from the sovereign wealth fund are reduced in line with budget plans.
On January 23, 2026, the National Bank of Kazakhstan announced it had kept its benchmark interest rate unchanged at 18%, maintaining an interest rate corridor of +/- 1 percentage point.
The NBK announced that inflation in 2025 stood at 12.3%, in line with its forecast. Food prices remained the main driver, rising 13.5% year-on-year, with notable increases in meat and vegetable oil due to higher production costs and strong export demand. Non-food inflation eased slightly to 11.1%, supported by the recent strengthening of the tenge, while inflation in paid services slowed to 12% following administrative reductions in regulated utility tariffs.
Monthly inflation accelerated to 0.9% in December 2025, while core inflation remained elevated at 0.8%, the central bank said. Inflationary pressures continue to be driven by strong domestic demand outpacing supply, alongside the secondary effects of tariff reforms and fuel market liberalisation.
Inflation expectations among the public for the year ahead rose to 14.7%, while expectations among professional forecasters edged up to 10.8% for 2026, according to the NBK.
The NBK last raised its base rate in October 2025 from 16.5% up to 18%.
