ADB elevates inflation forecast for Caucasus and Central Asia 

Inflation in the Caucasus and Central Asia is forecast to remain elevated at 10.6% in 2023 and 7.8% in 2024, the Asian Development Bank (ADB) said in its Asian Development Outlook (ADO) July 2023, Report informs.

Both projections are higher than in ADO April 2023, mainly because of high inflation in Kazakhstan and especially Azerbaijan, where inflation held up at 11.5% in the first 5 months of 2023 despite tightening monetary policy.

“In Kazakhstan, external inflationary pressures eased, but tamping down inflation will be hampered by recently announced augmentation to expansionary fiscal policy in both 2023 and 2024,” the ADB said.

The ADO also says that by contrast, inflation decelerated significantly in Georgia, from 13.1% year on year in the first 5 months of 2022 to 5.4% a year later, and in Armenia from 7.7% to 5.2%. Central banks in both countries have thus lowered their policy rates for the first time since 2020. Inflation forecasts in this report are thus revised down for both countries in both years, as they are for Turkmenistan as well.