Eurasian Development Bank Forecasts 4.3% Inflation for Kyrgyzstan
Inflation in the Kyrgyz Republic Slows to 4.1 Percent in July
Inflation in the Kyrgyz Republic has slowed down to 4.1 percent in July from 4.5 percent a month earlier, according to the macroeconomic review of the Eurasian Development Bank (EDB).
Analysts attribute this trend to the weakening of price pressure in the food segment, which only increased by 0.4 percent in July compared to 1.2 percent the month before. However, world prices for essential items such as vegetable oil, meat, and sugar have been on the rise for several months, which could lead to upward price pressure in the Kyrgyz Republic.
The price of alcoholic beverages and tobacco products saw a significant increase of 9.7 percent, partially due to an increase in excise taxes. Non-food products also experienced a price growth of 7.4 percent, while services saw a 6.8 percent increase. Import prices and tariff hikes for transport services, restaurants, and hotels are contributing factors to these increases.
The EBR experts forecast a price growth of 4.3 percent by the end of the year. The National Bank of the Kyrgyz Republic has kept the key rate at 9 percent, citing the volatility of global commodity markets, planned tariff policy revisions, and increased inflation expectations as key factors influencing their decision. The central bank predicts annual inflation to reach the target of 5-7 percent by the end of the year.
Overall, the EBR experts believe that current monetary conditions are close to neutral and do not anticipate any changes in the key rate until the end of 2024.
