BISHKEK, Kyrgyzstan, October 6. If the National Bank of Kyrgyzstan (NBKR) maintains its current monetary policy, inflation in the country is expected to gradually decrease to 7 percent by the end of 2025, World Bank analysts believe, Trend reports.
Inflation rate is predicted to remain high at 12 percent in 2023, primarily due to increasing tariffs for electricity and other utilities. It is projected to decrease to 10 percent in 2024.
Kyrgyzstan's inflation has slightly eased to 10.5 percent by June 2023, mainly driven by moderation in fuel and food prices. The recent tariff hikes for utilities, such as electricity and water, have been the primary contributors to inflation. The NBKR has maintained its policy rate at 13 percent in the first half of 2023.
WB warns that this year high food prices, job insecurity, and declining remittances will continue to be significant concerns for the well-being of the Kyrgyzstan’s population.
Poverty levels are expected to decrease by 0.6 percent to 14.9 percent, reflecting the positive impact of expanded social protection programs and wage increases that offset the negative effects of declining remittances and slower economic growth.
However, there are substantial risks to this outlook.
"A worsening of the Russian economy could lead to a further decline in remittances. Stricter enforcement of existing international sanctions against Russia or the imposition of secondary sanctions on Kyrgyz-based companies could have a significant impact on trade and domestic economic activity," the bank said.
According to WB, inflation rate in Kyrgyzstan was 11.9 percent in 2021, and 13.9 percent in 2022.
