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Price barometer (July 2022)

Main conclusions

  • Annual inflation continued to rise in July and amounted to 15%. The increase in consumer inflation occurred due to the rise in the cost of food and non-food products;
  • There is a slight softening of inflation pressure against the background of a global decline in prices for the main food groups. The current situation in the world food and energy markets reduces the likelihood of another acceleration of global inflation;
  • World food prices decreased significantly compared to recent months – by 8.6% to 140.9 points in July. However, food prices are still higher than the values of the same period last year – by 13.1%;
  • The realization of most of the risks that were noted by the IMF in April 2022 led to an increase in global inflation forecasts for developing countries to 9.5% (+0.8 p.p. compared to the April forecast) and a decrease in global economic growth forecasts to 3.2% (-0.4 p.p.);
  • We can see a slowdown in monthly inflation in all components compared to previous periods. However, the current level of monthly inflation in Kazakhstan (+1.1%) remains higher than in the same period of last years;
  • High prices for consumer goods will have a restraining effect on the dynamics of consumer demand and shift its structure towards cheaper substitute goods;
  • The food inflation level was 1.0% MoM (19.7% YoY). The slowdown in food inflation is provided by the disinflationary effect of the seasonal cheapening of vegetables and fruits, as well as a decrease in prices of agricultural producers against the background of the new harvest period coming;
  • The ongoing geopolitical tensions and global monetary tightening, in conditions of high import dependence on domestic demand, have a pro-inflationary effect on the prices of non-food products through the exchange rate to domestic prices transfer effect;
  • Despite the rise in the cost of energy sources in foreign markets, maintaining high growth rates of service inflation in terms of administrative restrictions creates space for imbalance accumulations. And this, in turn, may impact current expectations and future inflation;
  • A cautious monetary policy tightening creates conditions while the base rate can’t keep pace with the actual level of inflation, which leads to a negative level of the real interest rate. As a result, monetary conditions continue to have a stimulating effect on demand growth;
  • The continued annual inflation acceleration and the National Bank of the Republic of Kazakhstan’s opinion that the peak of inflation has not yet passed create prerequisites for another base rate increase. Otherwise, in addition to general economic factors, non-anchored inflation expectations will increase the overall inflation.

Risks and prospects

There is a slight softening of inflation pressure against the background of a global decline in prices for the main food groups. The current situation in the world food and energy markets reduces the likelihood of another wave  of global inflation acceleration.

The realization of most of the risks that were noted by the IMF in April 2022 led to an increase in global inflation forecasts for developing countries to 9.5% (+0.8 p.p. compared to the April forecast) and a decrease in global economic growth forecasts to 3.2% (-0.4 p.p.)

Sufficiently high domestic prices for consumer goods will have a restraining effect on the dynamics of consumer demand and shift its structure towards cheaper goods.

The ongoing geopolitical tensions and the global monetary tightening have a pro-inflationary impact on the prices of non-food products. This is due to the high import dependence on domestic demand and through the exchange rate to domestic prices transfer effect

Despite the rise in the cost of energy in foreign markets, maintaining high growth rates of service inflation under non-monetary measures of the state to control inflation creates space for the accumulation of imbalances that can impact the trajectory of future inflation.

The trajectory of the base rate increase has not yet kept pace with the inflation growth, which leads to periodic negative rates in the economy. Such monetary terms do not create significant prerequisites for reducing the inflation contribution from the demand and lending.

Read more in the paper

Aizhan Alibekova

Senior Analyst

09 October 23

372

How not to be unemployed: what you need to know about the future labour market

Experts of the World Economic Forum (WEF) presented new forecasts for business, professions and skills development in the next 5 years. The study is based on surveys of the largest employers and their expectations regarding business development, professions and skills. The survey involved 803 companies employing more than 11.3 million people, covering 27 industry clusters and 45 economies worldwide.

Key insights:

  • Employers expect structural changes in 23% of jobs;
  • The "green" economy is the main source of new jobs;
  • Economic challenges are the greatest threat to the labour market;
  • Advanced technologies will remain a key driver in business transformation;
  • About 75% of the surveyed companies plan to implement AI by 2027;
  • Up to 43% of all business tasks will be performed by machines in the coming 5 years;
  • The most popular profession is artificial intelligence and machine learning specialists;
  • Analytical thinking is a key skill for a successful career;
  • 47% of the surveyed employers evaluate their skills when selecting candidates, and 45% require a diploma;
  • In the next five years, 44% of the basic skills of employees will become obsolete and 6 out of 10 employees will have to undergo training.

One-off Researches


Businesslabour marketAlexandra Molchanovskaya

06 September 23

1707

Financial analytics: How much do we spend on routine expenditures?

We face a variety of expenses that vary depending on our needs, circumstances and preferences in our daily lives. Some people need quality food, others need to repay loans regularly and for some entertainment and recreation become a priority. However, the question often arises: Do we have enough income to meet all these needs? What amount of money is needed to achieve a comfortable standard of living? Is it possible to classify yourself as middle class by your expenses? 

In this regard, we decided to analyze the core expenditures that each person or family needs to achieve a minimum level of comfort and meet basic life needs. As a result of the study, we divided the employees of Astana and Almaty cities into 6 groups depending on their income and expenses and also determined the size of each class: the least well-off, low-income, lower middle class, middle class, prosperous and well-off. 

Key insights:

  • An average of 246.3 thousand tenge or 60% of salary is spent on core expenditures every month.
  • The largest amount of daily expenses is observed in the first 4 days after receiving a wage.
  • At least 450 thousand tenge per month is required to satisfy all basic needs for a comfortable life in megapolicies.
  • Almost half of the employed in Astana and Almaty cities (49%) do not have enough earnings to cover their daily expenses.
  • The is an essential disparity between workers and cities - there are 4 times more workers with financial difficulties in Almaty than in the capital.
  • Only 4.4% of employees with wages from 700 thousand to 1.2 million tenge, whose daily expenses account for 40-50% of income, can be attributed to the middle class.
  • Employees with above-average incomes make up the smallest share of the employed population - 2%. 

One-off Researches


ConsumptionStandard of livingAlexandra Molchanovskaya

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