The government of Kyrgyzstan intends to take a number of measures, which, as the Cabinet hopes, will help curb the rise in prices for basic foodstuffs in the country. But experts are not optimistic in their forecasts - not only food in the republic will continue to rise in price in 2022. There are several reasons for this.

January confirmed

The fact that pessimistic predictions about price increases in the republic in the coming year are beginning to come true was confirmed by the beginning of 2022. In the last two weeks of January, according to the National Statistical Committee, seven out of 12 so-called basic foodstuffs - rice, flour, white bread, horse meat, milk, sunflower oil, black tea - rose in price. Slightly cheaper beef and lamb. The cost of eggs, potatoes and sugar has not changed.

However, if we talk about other food products, their prices have risen significantly. Take, for example, butter. Before the new year, a pack of it in large stores in Bishkek could be bought for 90 soms, after - at least 120.

Thus, the upward trend in food prices, which began in 2020 and accelerated after the announcement of the coronavirus pandemic, is likely to continue in 2022. Last year, inflation in Kyrgyzstan, according to official data, was the highest among the countries that are members of the Eurasian Economic Union. Meat of all kinds, like bread, has risen in price by more than 10 percent, and milk, vegetable oil and sugar - by more than 20 percent.

Why?

Experts predict an inevitable rise in prices in 2022, primarily food. According to the head of the Association of Suppliers of the Kyrgyz Republic, Gulnara Uskenbayeva, one of the main reasons is the poor harvest of the past two years. “Another point is that business no longer has reserves to contain prices. Most food products are imported into the country, which means that we are dependent on the dollar. If it rises, then prices will also rise,” she said.

But if sharp fluctuations in the exchange rate can be smoothed out by interventions of the National Bank of the Kyrgyz Republic, then the authorities of the republic are not able to influence the rise in prices for fuels and lubricants. The head of the Association of Oil Traders of Kyrgyzstan, Kanat Eshatov, has already warned the Kyrgyz people about a possible increase in the cost of fuel and lubricants in the near future by an average of five soms, which, of course, will spur price increases in almost all areas in the Kyrgyz Republic, especially those dependent on logistics.

The reason is that most of the gasoline and diesel fuel is imported into the republic. Since oil has recently become more expensive and is in great demand, the same, respectively, is happening with fuels and lubricants. With all the ensuing consequences, especially for countries that do not produce fuel and lubricants.

In general, in 2021, according to the Association of Oil Traders of the Kyrgyz Republic, the price of gasoline and diesel fuel in the Kyrgyz Republic increased by an average of 60-70 percent.

What to do?

The Cabinet of Ministers of Kyrgyzstan has already come up with several initiatives, which, as the Cabinet believes, can, if not completely stop the rise in prices in the republic, then at least keep it from sharp fluctuations. The government proposed to introduce a temporary ban for a period of six months on the export of certain types of agricultural products from the republic. The list includes wheat, wheat flour, vegetable oil, granulated sugar, domestic chicken eggs, feed (hay, straw, mixed feed, bran and grain feed), barley, oats, mineral fertilizers. In addition, the Cabinet proposes to establish a zero rate of value-added tax on imports, including cattle, sheep, horses, goats.

- The existing livestock of farm animals currently does not provide the population of the republic with meat, in accordance with the established physiological norms. At the end of 2021, the provision of meat in the Kyrgyz Republic through domestic production amounted to only 62 percent. To resolve this issue, it is necessary to cancel the VAT on the import of farm animals, the Ministry of Agriculture explained.

As noted in the Ministry of Agriculture of the Kyrgyz Republic, such a ban, which was in force in 2021, made it possible to stabilize the situation in the domestic food market of the country.

But, as independent experts say, in addition to food, there are also clothes, shoes, household appliances, and so on. Their prices won't stay the same either.

Meanwhile

The Eurasian Development Bank predicts that inflation in Kyrgyzstan will slow down to seven percent by the end of 2022. In turn, the National Bank of the Kyrgyz Republic predicts average annual inflation this year at the level of 9-10 percent.

bbabo.Net