The tenge will maintain relatively strong positions in August, and annual inflation will drop below 10% for the first time in recent period. This was reported by Qazaqyia.kz citing Kursiv Media.

Economist Ruslan Sultanov presented such a forecast, referring to calculations by the National Bureau of Economic Research.

August forecast

According to the forecast, the average exchange rate in August is expected at 470.5 tenge per $1, and annual inflation may slow to 9.9%. However, already in autumn the situation may change: analysts do not rule out weakening of the national currency, and price pressure in certain segments of the economy will remain above 10%.

As Sultanov noted, in July the average monthly exchange rate strengthened to 471.7 tenge per $1 against 487.9 tenge in June. Against this background, the National Bureau of Economic Research improved its August forecast from 484.7 to 470.5 tenge per $1.

Autumn forecast

However, the base scenario does not imply further sustainable strengthening. In September, the average exchange rate is projected at 486 tenge per $1, and in October – 499.7 tenge. In November, a slight strengthening to 496.6 tenge is expected, in December – to 494.2 tenge.

At the same time, the range of possible scenarios remains significant. In August, the exchange rate may be in the range from 453.1 to 488 tenge per $1. By December, the forecast boundaries expand to 476.7-511.7 tenge.

Thus, short-term expectations for the national currency have improved, but the forecast for the fourth quarter remains more cautious.

Inflation dynamics

Positive dynamics are also expected for inflation. In July, annual price growth slowed to 10.2%, and monthly – to 0.6%.

According to the forecast of the National Bureau of Economic Research, in August annual inflation may be 9.9%, in September – 9.5%. In October, the indicator is expected at 9.8%, in November – 9.6%, and by December it may decrease to 9.4%.

At the same time, Sultanov drew attention to the structure of price growth. By the end of the year, food inflation, according to the forecast, may slow to 8%. However, non-food goods may rise in price by 10.3% in annual terms, and services – by 10.4%.

This means that the decline in overall inflation below 10% will be ensured primarily by slowing price growth for food products. In other categories, price pressure may remain higher.

Factors affecting the tenge exchange rate

According to the given forecast, the tenge exchange rate in the coming months will be influenced by oil prices, the dynamics of the dollar on the world market, the volume of export foreign exchange earnings, import payments, and domestic demand for foreign currency.

For inflation, one of the key factors will be the transfer of fuel, tariff, and other costs into the final cost of goods and services. Additional domestic factors may also intensify price pressure.

According to Sultanov's assessment, August looks like the most favorable period of the second half of the year: a relatively strong tenge may be combined with a decrease in annual inflation below the psychological mark of 10%.

However, on a longer horizon, the situation looks less unambiguous. In autumn, weakening of the national currency is expected, and by the end of the year the main issue will be not only the overall inflation level, but also the preservation of high price dynamics for non-food goods and services.

As the economist summarized, the nearest indicators are improving, but in the future attention will shift from the current strengthening of the tenge to the stability of the exchange rate, and from overall inflation to its structure.