Zhibek Tokushova FIN19

US consumer prices continue to rise.

According to the US Bureau of Labor Statistics, the consumer price index rose by 0.4% in
September, bringing its growth over the past 12 months to 5.4%. People are concerned that the
price increase is expected to last longer than politicians and economists expected. Waves of
resentment are growing due to the shortage of labor and the remaining bottlenecks in the supply
chain.

Let us start by considering the fact, that we can meet absolutely identical economical problems in
Kyrgyzstan. For clarity, let's compare what caused the increase in consumer price index: in the
United States, as well as in Kyrgyzstan, the monthly growth was mainly due to a sharp increase in
prices for food, housing and gasoline, which accounted for almost half of the increase. Food and
gasoline price indices in America jumped by 1.2% each, while in our country the index jumped by as
much as 5.2% compared to the previous year.

However, in Kyrgyzstan, the main reason for the price increase is a significant global increase in the
cost of food products. We have a poor population and people spend most of their income on food.
Therefore, food inflation affects the most. In addition, the economy as a whole is on the decline.
There was no increase in wages, respectively, people cannot live richer. Fuel prices are also rising,
which means that prices for imported goods will continue to rise and it is all affects the level of
poverty According to the FAO Food Price index has now been growing for the 12th month in a row,
which has not been the case for 10 years. This is partly due to the situation that has arisen in the
world due to the spread of the pandemic. In addition, the increase in prices was also influenced by
such internal factors as: lack of own crops, for example, potatoes and carrots, which have to be
imported from abroad, the export of large and small cattle in live weight to neighboring countries.

Pandemic lockdowns have led to disruptions of traditional supply chains, change of suppliers and
other difficulties, which is why the index of the cost of food imports, including transportation costs,
which has reached an absolute record over the past 15 years, according to the National Statistical
Committee of the Kyrgyz Republic. As far as we know, world prices are also affected by delayed
demand and the recovery of business activity due to the pandemic in Kyrgyzstan, as well as
unfavorable weather conditions, dry weather in the main food producing countries, which affects
crop volumes

To draw the conclusion, we can say that, it is expected that consumer prices will gradually
decrease , because the Cabinet of Ministers of the Kyrgyz Republic has introduced, now there is a
ban on the export of certain types of agricultural products, such as wheat, wheat flour, sugar, rice,
vegetable oil and chicken egg and a complete ban on the export of feed: hay, compound feed, corn,
barley.