BAKU, Azerbaijan, July 20. Inflation rate in Caucasus and Central Asia is expected to remain elevated at 10.6 percent in 2023, Trend reports.
According to the data obtained from the Asian Development Bank (ADB), the forecast has been revised up by 0.3 percentage points, compared to the previous assessment.
These projections are higher than in ADO April 2023, primarily due to the high inflation rates in a number of the countries of the subregion, despite tightening monetary policy.
For instance, in Kazakhstan, external inflationary pressures have eased, but controlling inflation will be challenging due to the recent announcement of expansionary fiscal policies in both 2023 and 2024.
In contrast, Georgia experienced a significant deceleration in inflation, dropping from 13.1 percent year-on-year in the first 5 months of 2022 to 5.4 percent a year later. Consequently, the central banks of several countries have lowered their policy rates for the first time since 2020. As a result, inflation forecasts in this report have been revised downward for Georgia, as well as for Turkmenistan.
Looking ahead, ADB projects inflation rate for the subregion to ease to 7.8 percent.
Meanwhile, GDP growth in Caucasus and Central Asia is expected to decrease by 0.1 percentage points in 2023 - from 4.4 percent to 4.3 percent.
