An additional allocation of 5 trillion tenge from the National Fund into Kazakhstan's economy should not lead to a “mega-superinflationary effect.” This was stated by National Bank Chairman Timur Suleimenov.
HOW THE NATIONAL BANK ASSESSED THE IMPACT OF TRANSFERS
As reported by Ulysmedia.kz, journalists put the question of the impact of additional funds from the National Fund on inflation to Timur Suleimenov at a press conference dedicated to the reduction of the base rate.
The head of the National Bank described the additional 5 trillion tenge as a new input for the inflation forecast.
“Therefore, we certainly do not see anything extraordinary there that would give rise to some kind of mega-superinflationary effect. We have taken this into account in our calculations, built it into the model, and assessed the corresponding impact,” explained Suleimenov.
HOW THE 5 TRILLION TENGE WILL BE DISTRIBUTED
According to Timur Suleimenov, the 5 trillion tenge will be distributed over three years: 2 trillion tenge — next year, and 1.5 trillion tenge each — in 2028 and 2029.
The head of the National Bank noted that this amount must be considered in relation to the scale of the growing economy. Therefore, the regulator does not expect that the additional spending will, on its own, cause a sharp acceleration of inflation.
WHAT COULD CURB INFLATIONARY PRESSURE
Timur Suleimenov stressed that in order to minimise the impact of the transfers, it is necessary to eliminate “bottlenecks” in the economy. In his words, domestic supply of goods, works and services must increase in tandem with the growth in demand.
As necessary conditions, the head of the National Bank cited enhancing the economy's potential, creating added value, and expanding production. This, in his assessment, should help narrow the gap between growing demand and supply.
WHY THE QUESTION OF THE 5 TRILLION TENGE MATTERS
The additional funds from the National Fund have become a factor that the National Bank takes into account when assessing the inflationary situation. At the same time, Timur Suleimenov stated that, in his estimation, their impact will not be as significant as it might appear when considering the sum in absolute terms.
