Inflation in spring 2026 is moving in two different directions at once. Annual inflation continues to slow down, but monthly price growth remains relatively high. In April, annual inflation came in at 10.6%, while monthly inflation reached 0.8%. This confirms that the overall disinflation trend is still in place, but the current pace of monthly price growth is still above the level usually associated with stable low inflation over the medium term.
In simple terms, headline inflation is slowing faster than underlying price pressure is fading. That is why the structure of inflation and inflation expectations still matter a lot.
Earlier, the National Bureau of Economic Research (NBER) projected April inflation at 10.5%, meaning the gap between forecast and actual data was just 0.1 percentage points. The April forecast accuracy across components looked as follows:
- food inflation: forecast 11.3% vs actual 11.3% (exact match);
- non-food goods: 11.3% vs 11.7% (0.4 percentage point error);
- services: 9.0% vs 8.9% (0.1 percentage point error).
The main driver behind the current inflation setup is the end of the administrative freeze on fuel prices. This added pressure mostly to the non-food segment through direct fuel price growth, followed by rising logistics and transportation costs for businesses.
This is one of the key reasons why monthly inflation remains elevated even despite relatively favorable exchange rate dynamics. A stronger currency helps contain imported inflation, but the fuel shock acts as a domestic inflation impulse that spreads price pressure across broader market categories.
In that sense, the current inflation data fits well with the regulator’s earlier communication that the base rate would likely stay at 18.0% through the end of the first half of 2026. This was not only about caution. Policymakers also needed time to assess how the end of the fuel price freeze would feed into inflation, how quickly it would spread, and whether the impact would remain temporary or become more persistent through expectations and business costs.
In other words, tight monetary conditions are being used as insurance against second-round effects from higher fuel prices until it becomes clearer whether the shock is temporary or capable of locking the economy into a higher inflation regime.
Forecast results: may 2026 and the path through year-end
According to the updated forecast profile, inflation in May 2026 is expected to remain elevated, while monthly dynamics stay moderate:
- Annual inflation: 10.6-10.7% year-on-year (0.8-0.9% month-on-month);
o food products: 11.0% year-on-year (0.8% month-on-month);
o non-food goods: 11.8% year-on-year (0.7% month-on-month);
o paid services: 8.4% year-on-year (0.7% month-on-month).
The May inflation profile sends a mixed signal. On one hand, annual inflation holding near 10.6-10.7% supports the view that disinflation is continuing.
On the other hand, monthly inflation at 0.8-0.9% still points to strong underlying domestic pressure. Fuel prices remain a major factor here. Fuel affects inflation not only directly, but also indirectly through logistics and transportation costs. As a result, monthly inflation remains sticky even with a relatively supportive exchange rate backdrop.
The sustainability of the inflation path will depend on two things:
- how quickly the fuel price shock fades;
- how the regulator reacts going forward.
Assuming monthly inflation remains relatively moderate, the year-end inflation outlook has been revised toward a more pessimistic scenario. Inflation is now expected to reach 10.4% by December 2026.
The projected breakdown by components is as follows:
- food inflation – 10.0%;
- non-food inflation – 10.5%;
- services inflation – 10.8%.
The stability of this trajectory will depend not only on how quickly fuel-related inflation normalizes, but also on what happens with utility tariffs.
Potential utility tariff increases are becoming another major source of uncertainty. Current restrictions are temporary, and the existing tariff freeze expires in June 2026. If tariff growth accelerates after that, it could increase both the direct contribution of services inflation and broader second-round effects through higher business costs.
If rising fuel prices continue spreading into transportation, delivery, and related services, while tariffs begin climbing after June, monthly inflation could remain closer to the upper end of the forecast range even as annual inflation slows. In that scenario, the main risk is not a one-time jump in prices. The bigger problem is stronger inflation inertia.
Businesses would increasingly start pricing goods and services based on expected future cost growth:
- fuel;
- logistics;
- utility tariffs.
And that makes it much harder for inflation to return to lower monthly levels even under a relatively stable exchange rate environment.
The key signal from the current period is that annual disinflation continues, but inflation inertia is still alive. Price pressure is gradually shifting toward the cost side of the economy, meaning it is unlikely to disappear quickly on its own.
Right now, market-driven goods are becoming the main inflation driver, with fuel prices feeding through logistics and transportation channels. Services, for now, appear relatively calmer.
The main risk over the coming months is a double domestic inflation impulse:
- the end of the fuel price freeze;
- a possible acceleration in utility tariffs after the first half of 2026.
If these factors begin feeding into expectations and broader business pricing decisions, it will become harder for the regulator to move toward monetary easing. In that environment, a high base rate would no longer simply reflect caution. It would become a tool aimed at preventing a higher inflation regime from becoming permanent.
Ultimately, the inflation path will depend on:
- how quickly fuel and tariff effects fade;
- whether the exchange rate remains supportive;
- how domestic demand behaves.
Forecast methodology
The forecast is based on an approach focused on statistical consistency and comparability across time periods.
- Data and horizon. The analysis uses data starting from January 2011 through the latest available observations. This provides a long enough history to identify seasonal patterns and recurring inflation dynamics more reliably.
- Stationary series. Models are estimated using stationary representations of the data. In other words, the series are transformed so that key statistical properties remain stable over time. This is important for proper econometric modeling because non-stationary data can create misleading relationships and unstable estimates, especially over long periods.
- Consensus of independent econometric models. The final forecast is not based on a single model, but on an aggregated consensus approach.
This has several practical advantages:
- Lower model risk. If one model temporarily overestimates or underestimates seasonality, one-off shocks, or inflation inertia, averaging across models helps smooth those errors.
- More stability during unusual periods. Different models react differently to shocks and turning points, while a consensus approach reduces the risk of overfitting to isolated events.
- Better structural interpretation. Since both headline inflation and its components are forecast separately, consistency across models improves the reliability of conclusions about where inflation pressure is actually concentrated.
It is important to stress that forecasting inflation components is not just a technical detail. It is a way to test whether disinflation is broad-based and sustainable, or whether it depends on only one temporary factor.
Statistical error
Another important measure of model quality is recent forecast accuracy.
- In 2026, the average monthly forecast error stood at 0.2 percentage points for annual inflation and -0.1 percentage points for monthly inflation.
- In April 2026, the deviation from the forecast was 0.1 percentage points for annual inflation and 0.2 percentage points for monthly inflation.
These error levels suggest that the current modeling framework captures recent inflation dynamics and short-term inertia reasonably well. At the same time, all econometric models have natural limitations. Supply shocks, logistics disruptions, or administrative policy decisions can still cause temporary deviations in отдельных months.
Disclaimer: This material is analytical in nature and does not constitute individual financial or investment advice. Actual inflation dynamics may differ from the forecast due to supply shocks, tariff policy changes, external price factors, and shifts in economic behavior.
National Bureau of Economic Research specifically for EconomyKZ.org
