Kazakhstan inflation and rates seen staying high in 2026

For borrowers, that means another year of expensive money. Kazakhstan’s policy rate has already climbed to 18%, the highest since 1999, after inflation reached double digits in 2025. Bakhmutova said market lending would be close to prohibitive at those levels, leaving the quasi-state sector and the budget to carry much of the burden of credit support. That is economically important because it points to a more state-directed allocation of capital, even as the government leans on fiscal stimulus to sustain growth.

The mix also matters for the currency. A stronger inflation print in early 2026 would typically strengthen expectations for a cautious central bank, supporting the tenge in the short run, but Bakhmutova warned that weaker energy prices, heavier imports tied to investment projects and a softer trade balance could pressure the currency later in the year. She expects the tenge to weaken to around 550 per dollar by end-2026, versus a budget assumption near 540.

The broader narrative is one of policy trade-offs. The tax reform may give the state more room to fund spending and investment, but it also risks reviving inflation before easing eventually takes hold. That leaves investors weighing two competing forces: near-term support from fiscal outlays and a still-tight monetary stance, against the eventual possibility of lower rates, softer inflation and improved credit conditions if the shock does fade as expected.

The market signal so far is consistent with that tension. U.S. inflation-linked bonds have shown some volatility, while dollar strength has firmed in recent sessions, underscoring how sensitive global rates and currency markets remain to inflation surprises. In Kazakhstan, the main beneficiaries of the current setup are banks and budget-linked lenders with access to state funding, while consumer borrowers, mortgage seekers and private-sector credit demand are likely to remain under pressure until inflation decisively cools.