There is significant inflationary pressure in Kyrgyzstan, as noted by economic experts. According to the Eurasian Development Bank, this situation is caused by several factors, including a 9.9% increase in real wages and a 67.2% rise in consumer lending. This creates high domestic demand for goods and services, which, in turn, leads to rising prices. As a result, the inflation rate in the country has exceeded the target range of 5–7%, reaching 9.6%.
In response to these challenges, analysts consider the decision to raise the interest rate from 11% to 12% to be appropriate. Sergey Ponomarev, an economist and financial expert, commented that such a step by the regulator is a traditional method of controlling inflationary pressure.
“In the current conditions, many countries with developed market economies are also raising interest rates, as it is an effective tool for curbing prices,” Ponomarev noted. He added that while the rate increase will raise the credit burden, it should help cool consumer and business activity, which will aid in slowing inflation and bringing it back into the target range.
“It is important to implement such measures in a timely manner, and the current economic situation demands it,” the expert concluded.
For reference, the National Bank of Kyrgyzstan decided to raise the interest rate by 100 basis points to 12% at a meeting held on February 24.
