Kazakhstan Moves to Modernize Monetary Forecasting with IMF Technical Assistance

The IMF’s CCAMTAC and Institute for Capacity Development assessed the National Bank of Kazakhstan’s monetary forecasting and found strong staff, data, and IT foundations but weak, short-term, and poorly integrated forecasting methods. The approved FY2026 project will build a robust near-term forecasting system and embed it into the central bank’s broader policy analysis to strengthen monetary decision-making.

The International Monetary Fund’s Caucasus, Central Asia and Mongolia Regional Capacity Development Center (CCAMTAC), working with the IMF’s Institute for Capacity Development (ICD), carried out a scoping mission to the National Bank of Kazakhstan. The mission, led by Martin Fukac and consultant Zsolt Kondrat, was requested by the Kazakh authorities to help strengthen the country’s monetary analysis and forecasting capabilities. At the heart of this request was a recognition that reliable, well-integrated short-term forecasts are essential for effective monetary policy, especially in an environment of economic uncertainty and financial volatility.

The resulting High-Level Summary Technical Assistance Report provides a snapshot of Kazakhstan’s central bank's current position and its future objectives. It focuses on the Monetary Analysis Division, the unit responsible for forecasting monetary and financial indicators that inform internal discussions and policy decisions at the highest level.

Strengths Inside the Central Bank

The IMF assessment finds that the National Bank of Kazakhstan already has several important strengths to build upon. Staffing levels in the Monetary Analysis Division are considered broadly sufficient, and senior economists bring substantial experience and institutional knowledge. These senior staff members are seen as key assets, capable of guiding and mentoring younger colleagues as forecasting practices become more sophisticated.

Importantly, the report finds no major gaps in technology or data. The division has adequate IT resources and maintains extensive databases covering money supply, credit, deposits, government securities, monetary policy indicators, and global currency markets. The data are available at a suitable level of detail, span long enough time periods, and are generally consistent. This means the central bank does not face the common constraint of weak or missing data that hampers forecasting efforts in many countries.

Where Forecasting Falls Short

Despite these strengths, the report is clear that current forecasting practices have important limitations. Near-term forecasts rely mainly on basic time-series techniques and typically look no further than twelve months ahead. While useful for short-run monitoring, these forecasts often lack internal consistency and are not firmly anchored in the National Bank’s medium-term macroeconomic projections.

As a result, short-term monetary and financial forecasts do not always fit smoothly into the broader policy narrative. This weakens their usefulness for decision-makers, who need a coherent picture linking near-term developments with medium-term policy goals. The IMF mission, therefore, concludes that improving forecasting methods is less about collecting more data and more about adopting better analytical frameworks and practices.

Risks That Could Slow Progress

The report also highlights risks that could threaten the success of the reform effort. Staff turnover is a key concern, particularly if advanced forecasting skills remain concentrated among a small number of individuals. Limited resources and competing priorities within the institution could also delay implementation. Another challenge lies in ensuring that new tools are not used only temporarily but become part of everyday analytical work.

To address these risks, the IMF stresses the importance of strong management support, structured and continuous training, and careful succession planning. Without these safeguards, even technically sound reforms could fail to deliver lasting improvements.

A Clear Path Forward

Looking ahead, the report outlines a plan to develop a robust near-term forecasting system tailored to the needs of the Monetary Analysis Division. The goal is to improve the central bank’s ability to assess credit and financial market conditions and to judge whether they are consistent with the policy objectives set by the National Bank’s Board. The project will move through stages of development, testing, and validation, combined with hands-on training and real-time feedback for staff.

A central recommendation is to fully integrate the new near-term forecasting system into the National Bank’s broader forecasting and policy analysis framework. This would allow short-term projections to reinforce, rather than sit apart from, the medium-term macroeconomic outlook. The project has been approved and is scheduled for implementation in fiscal year 2026, marking an important step toward more coherent, forward-looking, and policy-relevant monetary analysis in Kazakhstan.