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Prices in Kyrgyzstan to grow by 4.7 percent by end of 2018

Specialists of the Eurasian Development Bank (EDB) forecast an increase in inflation in Kyrgyzstan at 4.7 percent by the end of the year. The quarterly macroeconomic survey of the group of the chief economist of the EDB says.

It is noted that the current development of the economic situation may influence inflation forecasts. Soft monetary conditions, plans to increase the excise rate, rising domestic demand, high probability of import of inflation from the world energy markets bear the risks of accelerating inflation in the country both in the short and medium term.

At the same time, a stable price situation on the world food market and the strengthening of som against the US dollar will restrain price growth in the next six months.

«As a result, in 2018 we should expect a moderate acceleration of inflation, which by the end of the year will reach 5-7 percent. In the medium term, in case of the timely tightening of monetary conditions, inflation will fluctuate within the designated limits,» the report says.

In 2018-2019, the EDB forecasts Kyrgyzstan’s GDP growth at the level of 4.2 percent. In 2020 — up to 5 percent.

«The expected reduction in gold production in 2018 will be compensated by the positive effects of the external economic environment. Improvement of the growth performance in the countries, the main trading partners of Kyrgyzstan, through exports and remittances will contribute to the expansion of domestic consumer demand. Higher growth rates of the economy in the medium term may be limited by systemic factors, for overcoming of which structural changes in the economy will be required,» experts concluded.