BISHKEK, Kyrgyzstan, December 28. Eurasian Development Bank (EDB) has warned that if the global economic recession deepens beyond initial expectations, it will primarily impact Kyrgyzstan's external economic activities, Trend reports.
According to the bank's analysts, in case of worse scenario - the slowdown in China's economy, a key supplier of components, would likely decelerate industrial production in Kyrgyzstan and reduce exports to EAEU countries. EDB expects this to weaken domestic consumer demand, consequently slowing down the country's overall economic activity.
"Risks of accelerating inflation prevail. The gradual increase in electricity tariffs is under discussion. If approved, these measures will have a one-time impact on inflation dynamics," the bank said.
Additionally, prolonged increases in grain prices are anticipated to have a more pronounced and widespread effect on inflation expectations. There's an increased likelihood of agricultural production price hikes in 2024 due to concerns over low yields caused by projected low water levels.
In its essential forecast, the bank anticipates a 4.5-percent GDP growth for Kyrgyzstan in 2024, driven by the implementation of a state investment program funded by international development institutions. Inflation is expected to slow down to 7.8 percent by the end of 2024, primarily due to weakened domestic consumer demand. In 2025–2026, inflation rates may stabilize at around 6 percent.