If you ask ordinary Kyrgyzstanis what they remember about the past year, most of them will answer — rising prices. That is indeed the case. Inflation rate in Kyrgyzstan is one of the highest in Central Asia.
The hope that price spikes would stop in 2022 has been dashed.
In 2020-2021, inflation was high due to COVID-19 restrictions around the world. Geopolitical tensions and the restructuring of logistics routes played their role in 2022.
When everything goes up in price
According to the National Statistical Committee of Kyrgyzstan, the growth of prices and tariffs in the country in general reached 13.5 percent in January — November last year. Alcoholic beverages and tobacco products rose in price by 21.7 percent, food and non-alcoholic beverages — by 14.8 percent. The cost of non-food products increased by 11.4 percent, tariffs for services provided to the population — by 8.4 percent.
The price of sugar rose the most in 2022 — by 31.8 percent.
In addition, prices for flour, meat, fish, cereals, drinks have increased. It is difficult to name a product that has not risen in price in the past year. The maximum increase in prices (15.8 percent) was registered in Naryn region. The price of alcohol and cigarettes increased the most there (by 43.3 percent).
It should be taken into account that the price spikes were colossal during the year. If in September they slowed down at least a little, then by the end of 2022 growth started again.
The highest official inflation rate was registered in January — April last year — 14.5 percent.
Then it slowed down a bit. It even dropped below 10 percent in June — July. But then it went up again not to stop.
The forecasts of the National Bank are completely pessimistic. The central bank expects that by the end of 2022, inflation at the end of the period (December to December 2021) will be about 15.5 percent, and the average annual inflation will be about 14 percent.
Unaffordable sugar, meat, milk
In 2022, in addition to the traditional price hikes for fresh vegetables and fruits, there was an increase in the price of the basic foods. If one can live without cucumbers, tomatoes, then the rise in the price of cereals, sugar and meat has hit the wallets of the Kyrgyzstanis painfully.
During the year, prices for almost all basic foodstuffs increased in the country.
So, sugar went up in price by 20 soms at once. If at the end of December 2021 the average price for it in the republic was about 71 soms, then by the end of 2022 it increased to 91 soms. And this was only the start. The price began to rise in early March amid the exhaustion of last year’s harvest and the sale of cane sugar. If the retail chains managed to keep prices by hook or by crook, then a kilogram of the product reached 120-130 soms in the markets.
The reserves of the State Material Reserves Fund of Kyrgyzstan had to be mobilized and a ban on the export of sugar was introduced. Only this helped to stabilize the price a little.
A similar situation was observed with flour. The state has taken measures to keep its price on the market. But the dependence on imports has led to the fact that the first grade flour has risen in price by 11 soms over the year, and the premium grade flour — by 12.5 soms. Prices for bread and flat bread increased by 8.5 soms and 11 soms, respectively.
If at the beginning of the year a loaf of bread cost an average of 15 soms, now it is already up to 20 soms in the capital. Bread is even more expensive in the regions — from 25 soms.
The largest growth at year-end was registered for meat. Beef has risen in price by 61.5 soms, and mutton — by 56 soms. Even before, Kyrgyzstanis could not always afford meat.
This is not the whole list. The price of eggs rose by an average of 9 soms, milk — by almost 12 soms, oil — by 3.5 soms.
In addition, following the results of 11 months, the National Statistical Committee recorded an increase in prices for:
- Fish — by 27 percent;
- Pasta and other grain products — by 25.1 percent;
- Butter — by 22 percent;
- Pork — by 18.7 percent;
- Dried fruits and nuts — by 17.3 percent;
- Rice — by 15.8 percent;
- Soft drinks — by 15.5 percent;
- Buckwheat — by 13.6 percent.
Diesel added to the problems
The past year will also be remembered by the rise in prices for diesel fuel. Its cost has grown so much that diesel fuel has become even more expensive than AI 95 gasoline. It is what is used in all special (tractors, combined harvesters) vehicles and trucks.
From January 1 to December 23, 2022, diesel fuel prices increased by 29.2 percent, or by 17 soms.
Moreover, the sharpest price hikes occurred during the harvesting period. Thus, in July, diesel fuel in Kyrgyzstan rose in price by 4.89 soms, or 7.5 percent. If at the beginning of the month diesel fuel cost 64.88 soms on average in the republic, then on July 29 its price reached 69.77 soms. From July 15 to July 29, the price increased by 2.41 soms.
«Prices are growing not here, but in Russia. The cost of diesel fuel is rising in their domestic market due to seasonal shortages. Accordingly, we have the growth. In addition, the ruble is strengthening. Recently, we have moved away from the dollar and switched to settlement in rubles. It has recently strengthened against the som by 38 percent. Conversion of the cost of fuel into the national currency causes the rise in prices,» the Minister of Economy and Commerce Daniyar Amangeldiev explained the situation.
By the way, AI 95 gasoline has risen in price by only 15 tyiyns over the year, AI 92 — by 58 tyiyns. It was possible to contain the prices, among other things, because the authorities gave oil traders a budget loan of 2 billion soms to replenish reserves. One can only guess why they did not do this with diesel fuel.
The issue of increasing the public transport fees that has loomed again was quite obvious. The City Hall of the capital has already proposed new rates. Yes, they have not yet been approved, but such a step has to be taken. In addition, the issue of increasing tariffs for garbage removal is considered. The reason is also the rise in fuel prices.
When housing rent costs a pretty penny
The ongoing world events have also affected the situation in the housing market in the country. After September 21, 2022, when Russian President Vladimir Putin announced partial mobilization, thousands of Russians decided to leave the state for the CIS and Georgia.
Entrepreneurial Kyrgyzstanis quickly realized that they could earn money on this and raised prices for rent of apartments and houses.
In just a few days, rent of apartments in the capital of Kyrgyzstan has grown by 1.5-2 times. Over the month, an average rent increased by 19-20 percent, and in some districts — 1.5-2 times. As a result, rent of a one-room apartment reached at best 25,000 soms.
Over time, the situation, of course, stabilized. But the rents have not come down much. There are still many guests in the country, so owners are not going to reduce prices either.
About tariffs again
2021 passed under the sign of growth of electricity rates. As a result of the discussion, they were raised only for the industrial sector. The rates remained the same for the population. The people perceive even the mention of their possible growth too negatively.
An increase in tariffs for the population was also expected in 2022, but the authorities again abandoned the idea.
On the other hand, the President Sadyr Japarov’s decree on measures to support low-income families came into force on January 1 last year, which sets a reduced electricity rate for recipients of the state allowance ui-bulogo komok. When consuming up to 700 kilowatt-hours per month, they pay 50 tyiyns per 1 kilowatt-hour. The support measure was applied to 110,000 families.
However, there was still a slight increase, but voluntary. By a resolution of the Cabinet of Ministers in July 2022, a new consumer group «Population using electricity without limiting consumption and power» (Unlimited tariff) was introduced. You can consume electricity without restrictions at a price of 5.04 soms per kilowatt-hour.
In addition, since 2022, budget-funded institutions have begun to pay for electricity at an increased rate of 3.4 soms per kilowatt-hour.
It is possible that the rates will still be raised this year. The National Bank presented the inflation forecast. It expects prices to rise. In addition, a previously postponed increase in tariffs for electricity, hot water supply and heating is also possible.
