The National Bank of Kazakhstan has raised its base rate from 15.25% to 16.5% to mitigate inflation risks amid economic uncertainty. Analyst Rassul Rysmambetov cites U.S. policy changes, economic deregulation, and VAT hikes as primary factors influencing this decision, advocating for a reassessment of Kazakhstan’s economic strategies in light of global tariff conflicts.
The National Bank of Kazakhstan (NBK) has increased its base rate from 15.25% to 16.5%, a significant rise of 1.25 percentage points amidst increasing economic challenges. This decision comes as part of efforts to address rising inflation concerns tied to economic deregulation, increasing tariffs, and a proposed Value Added Tax (VAT) hike, as noted by independent financial analyst Rassul Rysmambetov in a report by Kazinform on March 7.
Rysmambetov highlighted three critical factors influencing this decision. Firstly, shifts in U.S. policies under Donald Trump, particularly regarding energy, could impact Kazakhstan’s budget and inflation forecasts. Secondly, economic liberalization initiated by President Kassym-Jomart Tokayev last May has contributed to price and tariff deregulation. Lastly, proposed VAT increases have heightened inflation expectations among consumers.
Rysmambetov commented on the unpredictability of current global events, stating, “If there had not been such an active attack on oil and inflation expectations related to VAT, the situation could have been much more stable.” He emphasized the significant impact of global economic shifts on Kazakhstan and the necessity for the nation to reassess its plans for future economic stability.
Reflecting on broader economic implications, Rysmambetov remarked, “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. Therefore, it is necessary to review some plans.”
In conclusion, the National Bank of Kazakhstan’s decision to elevate the base rate to 16.5% is a strategic response to multifaceted economic challenges, including inflationary pressures and tariff uncertainties. Analyst Rassul Rysmambetov identifies critical influences stemming from shifts in U.S. policies, local economic liberalization, and anticipated VAT increases. This proactive measure underscores the necessity for adaptation in the face of evolving global economic conditions.
Original Source: astanatimes.com
