Government • 04 September, 2018

From the beginning of year, inflation rate remains within new corridor of 5-7% — Ministry of National Economy

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September 4 at the meeting of the Government chaired by the Prime Minister Bakytzhan Sagintayev, the data on the level of inflation for eight months of 2018 were heard.

As the Minister of National Economy Timur Suleimenov reported, since the beginning of the year the inflation rate has remained within the new corridor — 5-7%. In August, inflation was 0.2%, since the beginning of the year — 2.9%. Annual inflation was 6%.

"Since the beginning of this year, for all components of inflation, there has been a slowdown in price growth compared to the same period in 2017. The rise in food prices was 2.3%. Non-food products — 3,6%. Prices and tariffs for paid services are 3%," the minister said.

According to him, in the last three months there has been a decline in prices for food products, which led to the lowest value among the components of inflation.

At the same time, the greatest increase in prices was fixed for non-food products. The increase in prices is noted for diesel fuel, footwear, liquefied gas, medicines and household appliances. As Suleimenov noted, the prices for paid services grew moderately.

"Among the paid services, the largest increase in prices was recorded for air and railway transport services, legal services. Meanwhile, prices for car maintenance and hotel services have declined," he said.

In the regional context, since the beginning of the year, Atyrau (3.8%) and Mangistau (3.8%) regions show a high inflation rate, exceeding the average republican level (2.9%) by almost 1 percentage point. Less significantly exceed the average republican level of the North Kazakhstan (3.3%), Kyzylorda (3.2%), Astana (3.2%) and Pavlodar region (3.1%).

According to the Minister of National Economy, it should be noted that the weakening of the tenge will put pressure on prices and tariffs. Given the high correlation between prices and the national currency, the current rate of inflation can increase by 1 percentage point.

"Taking into account some weakening of the tenge and seasonality of inflation in 2018, the inflation rate will be close to the upper limit of the new corridor around 6.6-6.8%. Taking into account the fact that inflationary processes are intensifying in the fourth quarter, local executive bodies need to replenish stabilization funds in a timely manner, strengthen work on the uninterrupted supply of coal and diesel fuel to the market with price monitoring," Suleimenov said.

Chairman of the National Bank Daniyar Akishev, in his turn, noted that according to the forecast of the National Bank, the inflation rate will be in the specified corridor as planned for 2018, but in 2019-2020 it is possible to exceed and exit from a given corridor.

"First, it is connected with the sanctions regime against the Russian Federation, secondly, the decline in oil prices, thirdly — with the growth of social expenditures and loans," Akishev specified

Following the results of consideration of the issue, Prime Minister Bakytzhan Sagintayev instructed to keep under strict control the prevention of rising prices for goods and services. This issue will be considered monthly.

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