Experts' expectations regarding the national currency exchange rate continue to deteriorate for the eighth consecutive month, as noted by analysts from the Kazakhstan Finance Association. Among the reasons cited by experts are:
- the ongoing tightening of sanctions against Russia and the weakening of the ruble;
- the shift of liquidity from risky assets and emerging market economies to safer instruments;
- anticipated lower oil prices and an expected increase in imports to Kazakhstan (implementation of infrastructure projects);
- significant repayments on Kazakhstan's external debt (this year, payments on Ministry of Finance eurobonds amounting to $2.5 billion are due).
In a month, the USDKZT exchange rate is forecasted to reach 527.3 tenge per dollar (up from 524.1 previously), and in a year, it is expected to be 552.5 (increased from 545.2 previously). Nevertheless, the balance in the currency market might improve in February when substantial tax payments from the previous year provide significant support to the market.
The transfer of the national currency's depreciation into prices may take some time, which, combined with the need to assess the impact of the November interest rate hike, will likely result in a high probability of maintaining the rate at 15.25% during the upcoming National Bank meeting on January 17, analysts from the Kazakhstan Finance Association believe.
Additionally, the average forecast for expected inflation over the year (9.4%) remains significantly higher than its current levels (8.6% at the end of 2024) and the target figure (5%), which may necessitate maintaining tight monetary conditions in the country.
In a year, the base rate may be 125 basis points lower than its current value, reaching 14.0%. Consequently, the real rate will drop to 4.6% compared to the current value of 6.65%, reducing the attractiveness of tenge-denominated instruments.
Expectations for oil prices in a year remain moderately negative and may be influenced by the growing supply of raw materials, the halt in the normalization of monetary policy in major economies, and the negative impact of potential future trade tensions on the global economy.
Lower energy resource prices and downward revisions of oil production forecasts for the current year (-1 million tons), high interest rates, and inflation, alongside deteriorating trade relations between major global economies and the outflow of liquidity to safe assets, could adversely affect the economic growth of Kazakhstan, according to analysts from the Kazakhstan Finance Association. Experts predict GDP growth in a year to be 4.3% (4.4% for 11M24).