36.6 billion som to combat inflation: Kyrgyzstan adopts a price plan with 57 measures

Central Asia Column “Steppe Ahead”

Kyrgyzstan is allocating 36.6 billion som to combat inflation, equivalent to approximately 420 million U.S. dollars. The Cabinet of Ministers in Bishkek has approved a price stabilization plan comprising 57 measures for 2026 and 2027; the details were published on November 6. This initiative comes amid an unusual situation: The economy grew by 10.8% in real terms from January through September, while annual inflation also stood at 10.8% in October. No other country in Central Asia currently combines such high growth with such high inflation.

57 Measures Totaling 36.6 Billion Som: The Plan Focuses on Agriculture

The Bishkek-based news portal open.kg reports, citing the Ministry of Water Resources, Agriculture, and Processing Industry, that the plan is based on Cabinet Resolution No. 715-t of September 18. Of the 57 measures, 32 fall under the Ministry of Agriculture, 11 of which pertain to livestock farming, six to the processing industry, four each to crop production, storage and logistics, and the domestic market and price regulation, and three more address legal and organizational issues. The ministry will receive the lion’s share of the funds: 29.4 billion som, or approximately 335 million U.S. dollars. Already this year, around 13 billion som—about 150 million U.S. dollars—have been allocated to the agricultural sector. The goal: increased domestic supply, lower production costs, and reduced dependence on imports. The ministry cites external markets, rising logistics costs, and dependence on imports as factors driving up prices. It also cites seasonal fluctuations in agriculture as a contributing factor; this is where the new storage and logistics capacities are intended to make a difference. The pressure to act is real: From January through July, consumer prices were 10.7% higher than in the same period last year.

The political bar is set high. According to the Kyrgyz financial portal Akchabar, Askat Alagosov, press secretary for President Sadyr Japarov, stated that the country would achieve “the lowest inflation rate among Central Asian countries” by 2027. A government program to combat inflation will take effect on January 1, 2027; the action plan aims to bring inflation below 7%. By comparison, the average annual inflation rate for the first nine months was 11%. Competition for this title is fierce. In Kazakhstan, inflation fell to 9.2% in October, reports the Times of Central Asia, an English-language regional newspaper. According to the Uzbek news portal Kun.uz, Uzbekistan’s central bank is targeting around 5% for 2027.

Inflation in Kyrgyzstan: National Bank Keeps Key Interest Rate at 12%

On October 27, the National Bank left the key interest rate at 12% for the fifth consecutive time. According to the Azerbaijani news agency Trend, the bank points to initial successes: annual inflation fell to 10.8% in October, down from 12.2% in September. Since the beginning of the year, inflation has totaled 8.5%; the medium-term target is 5 to 7%. The central bank assesses the foreign exchange market as stable, with money market rates hovering close to the key interest rate. A scenario presented by the National Bank in the spring illustrates how far the country still has to go to reach its target: if food and energy prices continue to rise, it even considered 15% inflation possible by the end of 2026. It assesses the price pressure as largely non-monetary, with food, fuel, higher electricity and utility rates, rising government spending, and wages cited as the drivers.

At the same time, the economy is booming. Nominal GDP reached 1.64 trillion som from January through September—about 18.8 billion U.S. dollars—with real growth of 10.8% fueled by construction investment, consumer spending, and tourism. The government has declared 8% growth a long-term goal; the World Bank ranks the country at the top of Europe and Central Asia in terms of growth.

Context: Fiscal policy is working against monetary policy

The plan addresses the supply side, while the demand side is left out. Rising government spending and strong wage growth are fueling consumption—and it is precisely these factors that the central bank itself cites as drivers of inflation. As early as this summer, growth and inflation were both running at double-digit rates simultaneously. As long as Bishkek maintains the 8% growth target through public investment, monetary policy will bear the brunt of the burden. The issue of financing also remains unresolved: the published resolution does not specify where the 36.6 billion som are to come from. And while more price regulation in the domestic market could dampen inflation in the short term, it distorts investment incentives in precisely those sectors that are supposed to increase supply. The next test comes on November 30, when the National Bank will once again decide on the key interest rate. If inflation continues to fall toward single digits, this course of action would be confirmed. If it remains in double digits, the goal of having the lowest inflation rate in Central Asia would recede into the distance, and the billion-som plan would be put to the test early on.

Source: open.kg 1, 2, Akchabar 1, 2, Trend, AKIpress, Times of Central Asia, Kun.uz (all EN)