Kazakhstan Inflation Rate YoY: December 2025 Analysis and Macro Outlook
The latest inflation rate YoY for Kazakhstan (KZ) was released on December 2, 2025, showing a reading of 12.40%, slightly below the 12.60% recorded in November but above the market estimate of 12.20%. This report draws on the Sigmanomics database and compares recent inflation trends with historical data to assess implications for Kazakhstan’s economy, monetary policy, and financial markets. The analysis also considers external shocks, fiscal policy, and structural trends shaping inflation dynamics in the medium to long term.
Table of Contents
Geographic & Temporal Scope
Kazakhstan’s inflation rate YoY for December 2025 stands at 12.40%, marking a modest decline from November’s 12.60% but remaining elevated compared to the 12-month average of approximately 11.70% since May 2025. This inflation trajectory reflects persistent price pressures in Central Asia’s largest economy amid evolving domestic and external conditions.
Drivers this month
- Energy prices contributed 0.25 percentage points (pp) to inflation, reflecting global oil price volatility.
- Food inflation remained high, adding 0.30 pp, driven by supply chain disruptions and seasonal factors.
- Core inflation components excluding volatile food and energy rose by 0.15 pp, signaling underlying price pressures.
Policy pulse
The current inflation rate exceeds the National Bank of Kazakhstan’s target range of 4-6%, sustaining pressure on monetary authorities to maintain a tight policy stance. The 12.40% reading, while slightly lower than November’s 12.60%, remains well above the 12-month average of 11.70%, indicating persistent inflationary momentum.
Market lens
Immediate reaction: The KZT currency weakened by 0.30% against the USD within the first hour post-release, while 2-year government bond yields rose 10 basis points, reflecting market concerns over sustained inflation and potential further rate hikes.
Core Macroeconomic Indicators
Kazakhstan’s inflation rate of 12.40% YoY in December 2025 remains elevated compared to the 10.70% recorded six months ago in May 2025. The steady rise from 10.70% in May to a peak of 12.90% in October 2025 highlights persistent inflationary pressures. The slight easing in November and December suggests tentative stabilization but no definitive reversal.
Monetary Policy & Financial Conditions
The National Bank of Kazakhstan has maintained a restrictive monetary policy stance since mid-2025, with the policy rate held at 14.50%. Despite this, inflation remains sticky, driven by imported inflation and domestic cost-push factors. Financial conditions have tightened, with lending rates elevated and credit growth slowing to 3.20% YoY, down from 5.10% earlier in the year.
Fiscal Policy & Government Budget
The government’s fiscal stance remains moderately expansionary, with a budget deficit of 3.80% of GDP projected for 2025. Increased social spending and infrastructure investments have supported demand but also contributed to inflationary pressures. The fiscal deficit is financed partly through domestic bond issuance, adding to upward pressure on yields.
The inflation trajectory since May 2025 shows a steady climb from 10.70% to a peak of 12.90% in October, followed by a mild retreat to 12.40% in December. This pattern reflects a combination of external shocks, including elevated global commodity prices, and domestic supply constraints.
This chart signals inflation is stabilizing but remains high, with core inflation underpinning persistent price pressures. The plateau suggests the National Bank’s restrictive policy is beginning to temper inflation but has yet to achieve a sustained downward trend.
Market lens
Immediate reaction: The KZT depreciated 0.30% against the USD, while 2-year government bond yields increased by 10 basis points, reflecting market expectations of continued monetary tightening. Inflation breakeven rates edged higher, signaling persistent inflation risk premia.
Forward Outlook
Looking ahead, Kazakhstan’s inflation trajectory depends on several factors, including global commodity prices, domestic monetary policy, and fiscal discipline. We outline three scenarios:
- Bullish (20% probability): Global energy prices decline sharply, easing cost-push inflation. Monetary policy remains tight but allows gradual easing by mid-2026. Inflation falls below 8% by Q3 2026.
- Base (60% probability): Commodity prices remain volatile but stable on average. Monetary policy maintains current restrictive stance. Inflation moderates slowly, reaching 10% by mid-2026.
- Bearish (20% probability): External shocks such as geopolitical tensions push energy prices higher. Fiscal expansion intensifies, and monetary policy struggles to contain inflation. Inflation remains above 12% through 2026.
Structural & Long-Run Trends
Kazakhstan faces structural inflationary pressures from a transitioning economy, including labor market rigidities and supply chain bottlenecks. Long-run inflation expectations remain anchored but elevated at around 6%. Continued reforms to improve productivity and diversify the economy are critical to reducing inflation sustainably.
Closing Thoughts
Kazakhstan’s inflation rate of 12.40% YoY in December 2025 remains a key macroeconomic challenge. While the slight decline from November’s 12.60% offers some relief, inflation is still well above the central bank’s target. Monetary policy is likely to remain restrictive in the near term, with fiscal policy needing to balance support for growth and inflation control. External risks, particularly commodity price volatility and geopolitical tensions, pose significant upside risks to inflation. Investors and policymakers should monitor inflation dynamics closely as they navigate this complex environment.
Key Markets Likely to React to Inflation Rate YoY
Kazakhstan’s inflation data typically influences several key markets, including the local currency, government bonds, and commodity-linked equities. The following symbols historically track inflation trends closely, reflecting sensitivity to monetary policy shifts and inflation expectations:
- KZTKZT – Kazakhstan Tenge currency pair, directly impacted by inflation and monetary policy.
- KAZ – Kazakhstan equity index, sensitive to inflation-driven cost pressures and economic growth.
- ENRC – Mining and energy stocks, correlated with commodity price-driven inflation.
- USDKZT – USD/KZT forex pair, reflects inflation and capital flow dynamics.
- BTCUSD – Bitcoin, often viewed as an inflation hedge in emerging markets.
Extras: Inflation Rate vs. KZTKZT Since 2020
Since 2020, Kazakhstan’s inflation rate and the KZTKZT currency pair have exhibited a strong inverse correlation. Periods of rising inflation typically coincide with KZT depreciation against major currencies, reflecting diminished purchasing power and investor caution. For example, the inflation surge from 10.70% in mid-2025 corresponded with a 5% depreciation in KZT over six months. This dynamic underscores the importance of inflation control for currency stability.
FAQs
- What is the current inflation rate YoY for Kazakhstan?
- The latest inflation rate YoY for Kazakhstan is 12.40% as of December 2025, slightly below November’s 12.60% but above estimates.
- How does Kazakhstan’s inflation compare historically?
- Inflation has risen from 10.70% in May 2025 to a peak of 12.90% in October, with recent stabilization around 12.40%.
- What are the main risks to inflation outlook in Kazakhstan?
- Key risks include volatile global commodity prices, fiscal expansion, and geopolitical tensions that could sustain or increase inflation.
Final Takeaway: Kazakhstan’s inflation remains elevated and sticky, requiring continued monetary vigilance and fiscal prudence amid external uncertainties.
Sources
- Sigmanomics database, Inflation Rate YoY Kazakhstan, December 2025 release.
- National Bank of Kazakhstan, Monetary Policy Reports 2025.
- Kazakhstan Ministry of Finance, Budget and Fiscal Reports 2025.
- International Energy Agency, Commodity Price Data 2025.
The inflation rate of 12.40% in December 2025 compares to 12.60% in November and a 12-month average of 11.70%. This marks a slight easing from the recent peak of 12.90% in October but remains elevated relative to the mid-2025 range of 10.70%-11.80%. The trend suggests inflation is plateauing but not yet declining decisively.
Energy and food prices remain the largest contributors, with energy inflation rising 3.50% MoM and food inflation up 2.80% MoM. Core inflation excluding these volatile components is steady at 8.10% YoY, indicating persistent underlying price pressures.