BISHKEK — The Asian Development Bank (ADB) has updated its inflation forecasts for Kyrgyzstan for the years 2024 and 2025, indicating a more favorable economic outlook than previously expected due to significant reductions in inflation rates observed in the first half of 2024.

According to Trend News Agency, the ADB now anticipates an inflation rate of 6.8 percent for 2024, a decrease from its April prediction of 7 percent. The projection for 2025 has also been adjusted downward to 6.2 percent from 6.5 percent. This revision reflects a broader trend of decelerating inflation across Kyrgyzstan, particularly noticeable in food prices, which have seen a sharp decline.

The report highlights a substantial slowdown in average annual inflation, which fell from 12.7 percent in the first half of 2023 to 5.1 percent in the same period in 2024. By June 2024, year-on-year inflation had further decreased to 4.5 percent, with core inflation dropping from 13.7 percent to 5.8 percent. The ADB attributed these declines to a combination of factors, including lower import prices, improved supplies of essential goods, a stronger local currency, and the effects of previous monetary policy tightening measures. Notably, food prices increased by only 1 percent.

Despite these positive developments, the ADB cautioned that inflationary risks remain. These include potential volatility in global food and energy prices, possible depreciation of the local currency, high inflation expectations, and strong demand pressures that could disrupt the current trend.