Annual consumer price index (CPI) inflation in Kazakhstan stood at 8.7% in August, up from 8.4% in July, according to data published by the country’s statistics office.

The figure marked an acceleration driven by annual food inflation, which stood at 11.4% in August - the double-digit food inflation rate is a result of global coronavirus pandemic-related restrictions while the impact of drought in agriculture may also have been a factor.

The regulator was previously aiming to achieve a 4% inflation rate in 2020, but consumer prices moved away from the upper boundary of the 4-6% inflation corridor that the central bank was maintaining. Inflation officially surpassed the 6% boundary in March 2020 and continued to rise due to the effects of the pandemic.

Non-food inflation stood at 7.3% in August, up from 7.2% in the previous month. 

Inflation in prices of services registered at 6.6% in August, up from 6.1% in July.

SOVA Research said in a note: “Despite the base effects of 2020, food inflation regained its rapid pace due to rising global food prices, which accelerated to 30% YoY in US dollar terms in July. Given the high share of food in the consumer basket (40%) and in household expenditures (nearly 50%, according to the National Bank of Kazakhstan [NBK]), such a factor could further weigh on inflation expectations. The 12-month-ahead expectation surged to 8.5% YoY in July vs. 7.3% YoY in June, with a record-high number of respondents noting increased prices. The largest price increases were seen in food items, gasoline, construction materials and some paid services.”