Kyrgyzstan Raises Inflation Forecast to 15%, Subsidizes Fuel Amid Price Hikes

Kyrgyzstan's Cabinet of Ministers has significantly revised its inflation outlook, projecting a rise to 14-15 percent for 2026, up from a previous forecast of 9 percent. This adjustment stems from persistent external economic shocks and escalating global fuel prices. First Deputy Chairman Daniyar Amangeldiev stated that without government intervention, the market price for AI-92 gasoline could reach 114 soms per liter and diesel 148 soms. To mitigate this impact, the government is compensating fuel traders from the national budget to prevent sharp price increases. Fuel reserves have been bolstered to 1.5 months' supply, with a target of 2.5 months. The nation is actively securing fuel through contracts with Belarus and China, and is in negotiations for oil processing with Uzbekistan and preferential oil and fuel oil supplies from Russia and Kazakhstan, respectively. Meanwhile, despite an increase in cashless payments, the total amount of cash in circulation in Kyrgyzstan reached 317.26 billion soms as of July 1, 2026, with the majority held by individuals. The cost of living also rose, with the subsistence minimum reaching 9,873.28 soms per month in the second quarter, and the highest regional figure recorded in Bishkek. President Sadyr Japarov addressed concerns about foreign land sales, clarifying that investment projects occupy less than 0.1 percent of the country's territory, which has expanded to over 20 million hectares after border adjustments. He announced plans to revise legislation to reclaim land leased for 49 years if development does not occur. Japarov also highlighted the nation's reduced state debt, now at 39 percent of GDP, and mandated it remain below 50 percent. He emphasized the strategic importance of the future China-Kyrgyzstan-Uzbekistan railway, predicting transit revenues comparable to the Kumtor gold mine, and criticized the import of electricity despite abundant water resources, noting the recent commissioning of nearly 50 small and medium hydropower stations. The European Union has expanded sanctions against Kyrgyz companies, though Kyrgyzstan maintains trade relations with Russia and is enhancing controls on banks and dual-use goods to avoid secondary restrictions, according to Amangeldiev.

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If state regulation is completely abolished, the market price of AI-92 gasoline would be 114 soms per liter, and diesel – 148 soms.