Inflation in December 2020 remained at the level of 0.9% mom. On an annualized basis, price growth accelerated to 7.5% from 5.4% yoy in December 2019, which is the highest reading since 2017. The pandemic and the negative economic consequences caused by it led to a significant increase in prices in 2020, including due to the large-scale injections of public funds into the economy. At the same time, a significant role in accelerating inflation was played by the weakening of state regulation of tariffs for housing and communal services in the fall of 2020, which was superimposed on the seasonal rise in prices for agricultural products and the weakening of the tenge. Taken together, these factors led to a reversal of the trend towards a slowdown in price growth observed in 2-3rd quarters, causing an acceleration in inflation at the end of the year. At the end of 2021, we forecast inflation slowdown to 6.5% yoy due to increased disinflationary factors.
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