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Kazakhstan's inflation target corridor has been increased in 2015, Tengrinews reports citing the Kazakh Minister of National Economy Yerbolat Dossayev’s presentation of the 2016-2018 draft national budget in Kazakhstan’s Senate.
As a result of the weakening of the Kazakh tenge, the inflation rate in October constituted 5.2 percent, 9.4 per cent in annual terms. The rapid depreciation of the tenge and surge of inflation in September came after the National Bank of Kazakhstan moved to a free floating exchange rate in August 2015. The National of Kazakhstan then established an inflation target corridor of 6 to 8 percent for 2015.
Amid the tenge devaluation, prices for imported goods continue growing, and the inflation rate is expected to rise in the next months accordingly. For this reason, the 2015 inflation targeting corridor was changed from the previous 6-8 percent to 8-10 percent.
The new bill leaves the target inflation rate unchanged at the level of 6 to 8 percent in 2016-2017 - 5.7 percent in 2018, 6.4 percent in 2019, and 4.3 percent in 2020.
The forecast for real GDP in 2015 was reduced by 0.3 percentage points. However, the budget still has a GDP growth forecast of 2.1 percent for 2016.
The national budget for 2016-2018 is based on the exchange rate of 300 Kazakh tenge per 1 US dollar. Trends in the global commodity markets were also been taken into account when planning the budget for the following three years. The budget is based on oil prices of 40 dollars per barrel in 2016-2017, and 50 dollars per barrel in 2018-2020.
Reporting by Assemgul Kassenova, writing by Indira Urazova, editing by Tatyana Kuzmina
