Head of the National Bank Timur Suleimenov told about the results of socio-economic development and execution of the republican budget for 9 months of 2024 at the Government session chaired by the Prime Minister of the Republic of Kazakhstan, primeminister.kz reports.
He reported that the index of business activity, compiled on the basis of surveys of the National Bank, at the end of September this year was 51.2 points. The index remains in the positive zone for the eighth month in a row. In services, the index was 51.6, while in manufacturing the index was 52.4 points.
Meanwhile, the business climate index also remained positive in September. That is, current and future business conditions are assessed positively by the National Bank.
Annual inflation continues to slow down in the country, having made 8.3% in September.
The main contribution to the slowdown in price growth is the disinflation of food products - 5.1%. The growth of prices for non-food products amounted to 7.6%.
At the same time, the highest growth, according to Timur Suleimenov, continues to demonstrate inflation of paid services - 13.6% against the background of the ongoing programme ‘Tariff in exchange for investment’ and appreciation of a number of market services.
As for the monthly inflation, it slowed down in September and amounted to 0.4%, being slightly higher than the historical average.
In general, the price dynamics is in line with the forecast of the national bank and is formed under moderately tight monetary conditions.
Despite the decline in inflation, there is growing pressure on prices due to the presence of risk factors both in the external sector and within the economy.
Pro-inflationary pressures persist in the domestic economy on the back of sustained domestic demand, continued fiscal stimulus, rising inflation expectations, and rising regulated prices.
From the external environment, the risks are associated with the acceleration of inflation in a major trading partner - Russia and rising prices in the world food markets.
In these circumstances, the National Bank did not change the base rate, keeping it at 14.25%.
Also during the Government session, the chairman of the National Bank noted the importance of improving fiscal policy and reducing the volume of transfers from the National Fund.
Separately, Timur Suleimenov informed the Government about the situation on the currency market of the country. In September, the exchange rate of tenge slightly strengthened by 0.1% to 481.11 tenge per dollar. However, since the beginning of the year weakened by 5.8%.
In September, the tenge was supported by currency sales to ensure transfers from the National Fund to the national budget in the amount of $945 million.
Also, as part of levelling possible negative effect on the currency market of purchase of Kazatomprom JSC shares by the National Bank, they were sold $241.5m.
The volume of foreign currency purchase for investment of pension assets of the EPPF amounted to $500 m. In connection with the achievement of the currency share of pension assets of the EPPF target level of 40%, it was decided to suspend the purchase of foreign currency.
According to the head of the National Bank, the further dynamics of the tenge will depend on the expectations of market participants, the situation on world markets and changes in the geopolitical situation.
Timur Suleimenov said that the National Bank will continue to adhere to the flexible exchange rate regime, which excludes the accumulation of imbalances and ensures the safety of foreign exchange reserves.
The current account deficit due to the improved trade balance in 1H decreased to (-)$0.3bn from (-)$5bn in 1H last year.
Gross international reserves at the end of September totalled a record $107.2bn.
At the same time, the National Bank's international reserves increased by 23.6% YTD to a record $44.5bn.
Assets of the National Fund increased by 4.5% YTD, amounting to $62.7 billion. The main source of income was investment income, which accounted for 10.27% or $6.16 billion in 9 months of this year.
Pension assets of the UNPF also continue to show positive dynamics. Since the beginning of the year, they increased by 17.66% to 20.95 trillion tenge. Investment income since the beginning of the year totalled Tg 2.12 trillion. Pension contributions totalled T1.85 trillion, while early withdrawals amounted to T375.5 billion.
Timur Suleimenov said that the National Bank monitors the changing situation in the external and domestic markets and will continue to work to ensure macroeconomic stability and further policy to reduce inflation.
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