CPI inflation slowed down to 4.9% y/y in October, the State Stat Agency has informed. In m/m terms, inflation made up 0.3% while in ytd terms it reached 3.6%. In Jan-Oct, inflation made up 6.1% y/y.

Prices for food products increased by weak 3.3% y/y and by 0.2% m/m. In ytd terms, food prices went up by 1.8%. Growth was seen in prices for eggs (8.6% m/m), tomatoes (6.8% m/m), cucumbers (6%) and milk (3.4%). On the other hand, prices for potatoes went down by 7.4% m/m and for fresh vegetables - by 4% m/m.

Prices for non food-products increased by 2.9% y/y and by 0.4% m/m. In ytd terms, growth reached 2.2%. Among this group, prices for solid fuel grew by 2.3% m/m, glassy and ceramic products - by 0.7% m/m, clothes and shoes - by 0.4% m/m. Prices for petrol went up by 1.8% m/m and for diesel oil  - by 0.5% m/m.

Services remain the main driver of inflation although prices started to slowdown in m/m terms. In October, prices went up by 8.9% y/y but in m/m terms a growth of only 0.2% was seen. In ytd terms, prices increased by 7.1%. In this group prices went up in housing and utilities - cold water grew by 1%, wastewater disposal - 0.9%, garbage disposal - 0.5% and maintenance of accommodation - 0.2%. On the other hand, prices for electricity decreased by 0.2% m/m in the reported period.

The main reason for slower inflation is most likely a good result of harvesting this year as well as the governments' efforts to hold down increase in prices for utilities. This policy was confirmed by Murat Ospanov, the chair of the agency for regulating natural monopolies who stated that prices for services and utlitities would not go up in November. Slower inflation is also likely to be supported by lower imports prices as energy resources prices are going down as well as slow down in inflation in Russia and China - main trading partners of Kazakhstan. The National Bank of Kazakhstan keeps its infaltion target at 6-8% y/y this year.