Photo: Press service of the President of Kyrgyzstan

BAKU, Azerbaijan, October 16. Inflationary pressures in Kyrgyzstan intensified in 2026 amid higher energy and food prices as well as expansionary fiscal policy, the European Bank for Reconstruction and Development (EBRD) said in its September Regional Economic Prospects report.

"Inflationary pressures intensified amid higher energy and food prices as well as expansionary fiscal policy," the statement said.

In response, the authorities introduced temporary fuel subsidies estimated at approximately 1 billion Kyrgyz soms, retail fuel price caps, excise tax deferrals and a one-year moratorium on tariff and fee increases.

The National Bank of the Kyrgyz Republic has kept its policy rate at 12% since February, while inflation accelerated to 11.5% year on year in July 2026, compared with 8.8% a year earlier.

The EBRD projects real GDP growth of 8.7% in 2026 and 7% in 2027.

Trend estimates suggest that inflation in Kyrgyzstan could gradually moderate as energy and food price pressures ease and the impact of temporary government measures becomes more pronounced.

Moreover, Trend’s calculations indicate that under a scenario of improving supply conditions and continued monetary restraint, annual inflation could decline toward 8–9 percent in 2027 and 6–8 percent in 2028.

If inflationary pressures continue to ease, the National Bank could gradually gain more room to adjust monetary conditions while maintaining price stability. Lower inflation would also support household purchasing power and create more predictable conditions for businesses and investment.