The NBM explains its decision to continue monetary policy easing measures by the confirmation of a favorable outlook. Annual inflation in August continued its downward trend and amounted to 7.3%, decreasing by 0.6 percentage points compared to the previous month.
Structurally, the dynamics of annual inflation in August was determined mainly by the dynamics of regulated prices and prices for food products. According to estimates, aggregate demand continued to have a disinflationary impact on prices in the reporting period. Therefore, its support is now necessary, the regulator believes.
The National Bank expresses its position on supporting and stimulating aggregate demand, including by stimulating consumption and investment, with a focus on curbing inflationary expectations. “The effect will spread gradually through the reduction of interest rates in the money, deposit and credit markets,” warns the NBM.
The next monetary policy decisions depend on updates to the inflation outlook. The balance of risks is now balanced, with a disinflationary bias until the end of the forecast horizon – end 2025. But uncertainties remain significant. And the main ones are the results of agricultural production in the current and next year, adjustment of tariffs for regulated services. Among the risks are also population migration and more restrained regional demand as a result of mutual sanctions imposed by the countries of the region.
