As of May 15, the annual inflation rate reached 7.5% after rising to 8.6% in April, the Chairman of the National Bank of Kyrgyzstan Tolkunbek Abdygulov reported.
According to forecasts of the National Bank, inflationary processes will slow down in the second half of the year. It is planned that the National Bank will work with inflation until the end of the year, as well as to monitor the situation on external food markets.
“Inflation outbursts in April and May were associated with a sharp increase in food prices. This is due to the effects of coronavirus pandemic. Seasonal increase in prices for fruits and vegetables contributed to it,” Tolkunbek Abdygulov stressed.
The head of the National Bank noted that the external and internal economic effects of the COVID-19 pandemic and the situation on the world oil market, along with the increased demand of the population for essential goods in the context of the introduction of quarantine measures to combat coronavirus, led to acceleration of current inflation.
According to the National Bank, the expected weakening of domestic demand will have a restraining effect on the dynamics of inflation in the country in the medium term.
“According to updated forecasts, in the current shock economic conditions, there will be a temporary acceleration of inflation during the first half of 2020 in the economy of Kyrgyzstan with its average value remaining in unambiguous limits by the end of the year,” Tolkunbek Abdygulov said. (24.kg/Business World Magazine)
