Inflation across Central Asia is project to remain fairly muted in 2012
2012-11-15 16:34:31
Inflation across the Caucasus and Central Asia is projected to remain fairly muted on average in 2012, thanks to rapidly falling food inflation in the oil- and gas-importing countries, according to the IMF Regional Outlook: Middle East and Central Asia released on November 12.
Higher global food prices, if sustained, may rekindle inflation given the high sensitivity of local food prices to global prices, particularly in the oil and gas importers, the IMF said.
The oil- and gas-exporting countries could cushion the impact through temporary subsidies or similar measures, which their substantial fiscal space can accommodate. The oil and gas importers are slowly rebuilding their fiscal buffers, but these fall well short of what is needed to enable a policy response in the event of adverse shocks in commodity markets.
Potential fiscal costs associated with supporting weak state banks also cloud the fiscal picture in the Kyrgyz Republic and Tajikistan.