Introduction………………………………………………………………………………………..3
1. Inflation in Q1 2007…………………………………………………………………………….5
1.1. Inflationary processes………………………...………………………………………5
1.2. Fiscal policy…………………………………………………………………………12
1.3. Monetary policy……………………………………………………………………..14
2. Inflation estimation on Q2 and Q3 2007……………………………………………………...24
3. Inflation forecast for 2007…………………………………………………………………….25
Conclusion……………………………………………………………………………………….27
Reference………………………………………………………………………………………...27 Reasons for inflation in Kazakhstan are discussed in the scope of this paper.
The material covers 2007 year, and some made comparisons reference to the previous few years (maximum starting from 2005).
In order to discuss inflation some key terms and concepts are introduced below.
Inflation in the Republic of Kazakhstan is calculated based on a consumer price index (CPI) that characterizes the change in the overall level of prices for goods and serves acquired by the population for personal consumption in the cities of Astana and Almaty, all the oblast centers, and a sample set of cities and rayon centers. The consumer basket for calculating inflation reflects the structure of household expenditures and comprises 508 goods and services making up the largest proportion in the population's consumption.
Core inflation consists of inflation excluding short-term irregular price changes influenced by certain factors of an administrative, one-off, or seasonal nature. In Q1 2007 there was an insignificant increase in prices on the consumer market by comparison with the preceding quarter.
The main reason that inflation remained at a fairly high level is an increase in the cost of paid services and foodstuffs, which increased in cost in this period by 3.3. and 3.2 percent respectively, and prices for non-foodstuffs increased by 0.9 percent (Figure 1).
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