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EDB predicts price increase in Kyrgyzstan in near future

The Eurasian Development Bank forecasts an increase in prices in the medium term. This is stated in its macroeconomic survey.

As noted, despite the slowdown in inflation in the third quarter of 2017, in the medium term, prices increase is expected to accelerate. Prerequisites are expanding domestic consumer demand, fueled by the inflow of remittances and fiscal stimulus measures.

Inflationary background in the countries — trading partners of Kyrgyzstan will not have a significant impact on import prices. Inflationary risks lie in the uncertainty of the tariff policy for electricity and heating, expansive monetary conditions and high sensitivity to price fluctuations in world food and energy markets.

The projected inflationary risks make it necessary to tighten monetary and credit conditions to keep inflation in the target corridor at 5-7 percent.

«Despite the growth of optimism about the recovery of economic activity in the countries — the main trading partners of Kyrgyzstan, external demand will still remain limited,» the EDB concludes.