Inflation in the spring of 2026 continues to slow in annual terms, but monthly price growth remains noticeably persistent. In May, annual inflation came in at 10.4%, while monthly inflation reached 0.7%. This confirms that the broader disinflation trend is still intact. However, the current pace of price increases remains above the level typically associated with stable, low inflation over the medium term.
In other words, annual inflation is falling faster than underlying price pressures are easing. As a result, the structure of inflation and the way inflation expectations are formed continue to play a critical role.
Earlier, the National Bureau of Economic Research (NBER) forecast inflation in May at 10.6-10.7%, meaning the gap between the forecast and the actual outcome was only 0.2-0.3 percentage points. The forecast error by component was as follows:
- Food: forecast 11.0% versus actual 10.7% (error of 0.3 p.p.);
- Non-food goods: 11.8% versus 11.7% (error of 0.1 p.p.);
- Services: 8.4% versus 8.7% (error of 0.3 p.p.).
The key driver of the current inflation picture has been the end of the administrative freeze on fuel prices. This increased price pressure primarily in the non-food segment through higher fuel costs and, subsequently, rising transportation and logistics expenses for businesses.
This explains why monthly inflation can remain elevated even when exchange rate dynamics are relatively favorable. A stronger currency helps contain imported inflation, but a fuel shock acts as a domestic source of inflation, spreading price increases across a wide range of market categories.
As a result, June’s inflation outlook is shaped by three major factors.
The first is monetary policy easing. With the policy rate now at 17.0% and the possibility of further cuts, expectations and consumer demand are becoming more important drivers of monthly inflation dynamics.
The second is the cost pressure coming from fuel prices. As monitoring measures fade, higher transportation, delivery, and related service costs can spread through the economy.
The third is tariff-related risk. As utility tariff monitoring comes to an end, uncertainty around service-sector inflation and secondary business costs increases.
Together, these factors create the main question for the summer. The regulator will likely be able to bring inflation into single-digit territory by the end of the year. However, the sustainability of that path will depend on how quickly fuel and tariff effects fade and whether they become embedded in inflation expectations.
Forecast results: june 2026 and the path through year-end
According to the updated forecast profile, annual inflation is expected to remain broadly stable in June, while monthly inflation stays moderate:
- Annual inflation: 10.2-10.4% year-on-year (0.6-0.8% month-on-month)
o Food products: 10.2% year-on-year (0.6% month-on-month);
o Non-food goods: 11.4% year-on-year (0.7% month-on-month);
o Paid services: 9.1% year-on-year (1.0% month-on-month).
During the summer, annual inflation is expected to continue gradually declining, although not in a perfectly smooth manner. Single-digit inflation is projected to arrive by the end of the season:
- July: 10.4% year-on-year;
- August: 10.1% year-on-year;
- September: 9.8% year-on-year.
Within this period, food inflation continues to cool more rapidly, supported by seasonal increases in food supply. Non-food inflation, meanwhile, remains more persistent.
Services appear somewhat softer during the summer, but monthly price growth in this category can still contribute to the overall inflation rate if business costs continue to spread more broadly across the economy.
This is the key message of the summer period. On paper, annual inflation moves into single-digit territory. However, the sustainability of that achievement will depend on whether monthly price growth remains moderate and whether secondary inflation effects begin to spread.
Inflation outlook through the end of 2026
The forecast continues to show single-digit inflation through year-end, although the path is unlikely to be perfectly linear.
After reaching 9.8% in September, inflation could temporarily move back toward the 10% mark:
- October: 10.1%;
- November: 10.0%;
- December: 9.9% year-on-year.
The composition of inflation at the end of the year is particularly revealing:
- Food inflation falls to 9.2% year-on-year;
- Non-food inflation remains around 10.4% year-on-year;
- Service inflation accelerates to 10.8% year-on-year.
In other words, the quality of disinflation becomes more mixed by December. The headline inflation rate stays in single digits, but inflation pressure increasingly shifts toward services and business costs. This is where tariff decisions and secondary effects from transportation, logistics, and utilities are most likely to show up. Food prices, meanwhile, remain the main force helping inflation move lower.
The main practical takeaway
Single-digit inflation by the end of 2026 remains achievable. However, the key issue is not the annual inflation rate itself, but whether cost pressures from fuel, logistics, and tariffs become embedded in broader inflation dynamics.
If they do, inflation is likely to remain closer to the upper end of the single-digit range and follow a more uneven path. If they do not, single-digit inflation will become more sustainable and create additional room for a cautious continuation of monetary easing.
The summer of 2026 is not simply about achieving a lower annual inflation number. It is a test of the quality and sustainability of disinflation. The baseline scenario points to single-digit inflation by the end of summer and its preservation through year-end. However, the durability of that outcome will depend on whether fuel and tariff effects spread into broader business costs and inflation expectations.
The policy rate cut on June 5, along with the possibility of additional easing, makes this test even more important. Future monetary policy decisions will depend less on the annual inflation figure itself and more on how broadly monthly price growth slows across the consumer basket and whether cost pressures from transportation and utilities spill over into other goods and services.
Forecast methodology
The forecast is built around an approach designed to ensure statistical reliability and consistency across different periods.
- Data and time horizon. The analysis uses observations from January 2011 through the latest available data, providing a long historical series for identifying seasonal patterns and recurring inflation trends.
- Stationary data series. Models are estimated using a stationary representation of the data, meaning key statistical properties remain stable over time. This is essential for sound econometric analysis, as non-stationary data can create misleading relationships and unstable estimates.
- Consensus of independent econometric models. The final forecast is an aggregated result rather than the output of a single model.
Advantages of the consensus approach include:
o Reduced model risk. If one model temporarily overestimates or underestimates the impact of seasonality, one-off factors, or inflation persistence, averaging across models helps smooth out those errors.
o More stable performance during unusual periods. Different models react differently to outliers and turning points, reducing the risk of overfitting specific episodes.
o Better forecast structure. When forecasting both headline inflation and its components, consistency across models improves confidence in identifying where inflation pressure remains strongest – food, services, or non-food goods.
It is important to emphasize that forecasting inflation components is not simply a technical addition. It is a way to determine whether disinflation is broad-based and sustainable or whether it is being driven by a single factor.
Statistical accuracy
One of the key measures of a model’s usefulness is its actual forecasting accuracy.
- In 2026, the average monthly forecast error was 0.2 percentage points for annual inflation and -0.1 percentage points for monthly inflation.
- In May 2026, the deviation between the forecast and the actual outcome was 0.2-0.3 percentage points for annual inflation and 0.2 percentage points for monthly inflation.
These error levels suggest that the forecasting framework captures current inflation dynamics and short-term inflation persistence reasonably well. At the same time, all econometric models face natural limitations. Unexpected supply shocks, major logistics disruptions, or administrative decisions can produce temporary deviations from the forecast in individual months.
Disclaimer: This material is provided for analytical purposes only and should not be considered individual financial or investment advice. Actual inflation outcomes may differ from the forecast due to supply shocks, changes in tariff policy, external price developments, and shifts in the behavior of economic agents.
National Bureau of Economic Research specifically for EconomyKZ.org
