Fuel price freeze to curb inflation and ease social tensions, says expert

The expert explained that this measure will "slow price increases since nearly all goods rely on transportation costs." He added that "inflation will, consequently, also slow, helping partially support the purchasing power of most Kazakhstanis given current income levels." 

According to Askar Ismailov, the decision also has significant social significance.

"Further price increases would only increase public irritation and protest sentiments. Over the past six months, society has already been overwhelmed by the new reforms being discussed, specifically, the tax ones, as well as the changes for small and medium-sized businesses. The recent decisions, therefore, served to ease these accumulating social tensions, even though this relief is temporary, lasting at least until the end of the first quarter of next year," he pointed out.

Ismailov noted that the partial rollback of several decisions affecting small and medium-sized enterprises (SMEs) was a kind of "error correction."

"Essentially, the review and partial repeal of several decisions concerning SMEs are also a form of 'error correction.' These measures prevented further deterioration of the situation. However, this work will need to continue in the coming months. There might be a need to reconsider the approaches or even replace those who initiated the new reforms. Clearly, some decisions were made that are not suitable for Kazakhstan at this time. Rather than boosting the welfare of citizens, the new initiatives essentially raised the tax burden. At the present level of income and industrial progress, this posed a risk of severely weakening the national economy," he said.

The expert also commented on the moratorium's impact on farmers.

"As for the agricultural sector, it was not directly affected by the moratorium because producers have traditionally received diesel fuel at subsidized prices. For a wider range of costs, the measures adopted have partially reduced the financial pressure on them. This, however, is a temporary solution, effective only until the end of the first quarter of 2026. The subsequent impact on the economy will be determined by the steps taken after that deadline. It is also crucial to consider the major geopolitical changes that are expected to impact Kazakhstan," he concluded.

Kazinform previously reported that at the instruction of the Head of State, the Kazakh Government is implementing measures aimed at ensuring macroeconomic stability and mitigating the potential negative effects of economic reforms.