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Tengrinews.kz – The National Bank of Kazakhstan has announced signs of economic overheating. This is stated in a press release distributed on the occasion of maintaining the base rate at the previous level.
"The growth of the short-term economic indicator by the end of 2024 accelerated to 6.2% y/y, which may indicate signs of economic overheating. Production growth is observed in all major industries. The greatest growth was shown by the agriculture, construction, trade and transport sectors. There is also an acceleration in the dynamics of the manufacturing industry," the National Bank reported.
Domestic demand exceeds supply and remains stably high against the backdrop of active fiscal stimulus, growth in cash income, and expansion of investment in the non-resource sector. This is confirmed by the growth of retail trade and consumer lending. The business activity indicator monitored by the National Bank has been in the positive zone for 11 months in a row.
Pro-inflationary risks remain. On the external side, they are caused by higher inflation in Russia, and on the internal side, by the continuation of the reform in the sphere of regulated prices, the effect of the tenge weakening being passed on to prices, high domestic demand with fiscal stimulation, unanchored inflation expectations, and the growth of consumer lending.
"The aggregate monetary conditions have somewhat eased against the backdrop of a weakening exchange rate, accelerating inflation expectations, and an increase in the actual inflation dynamics. In this regard, at the next decision, which will update the forecasts for key macroeconomic indicators, the Monetary Policy Committee will assess the need for additional tightening of monetary policy to return inflation to a trajectory of sustainable decline to the target of 5%," the National Bank added.
The next scheduled decision of the Monetary Policy Committee of the National Bank on the base rate will be announced on March 7.
Earlier, it has become known that the National Bank plans to change currency exchange rules.
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