Global Food Price Inflation and Policy Responses in Central Asia

Publication Date: March 01, 2012
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
Summary: This paper examines the implications of elevated global food prices for inflation in select Central Asian economies - Kazakhstan, the Kyrgyz Republic, Tajikistan, and Uzbekistan. The findings suggest that global food inflation has significant short-run effects that build over time. Inflation outcomes simulated under alternative global wheat price assumptions underscore these vulnerabilities, and suggest that sustained administrative measures are unlikely to prove effective. In line with structural economic features, the interest rate channel of monetary policy is found to be limited, arguing for a broad policy strategy to control more expansive inflationary pressures. Looking ahead, measures to enhance supply responses, deepen domestic financial markets, develop adequate social safety nets, and increase central bank independence are warranted.
Series: Working Paper No. 12/86
Subject(s): Agricultural prices | External shocks | Price increases

Author's Keyword(s): Central Asia | inflation | food price shocks | policy responses | monetary policy | Kazakhstan | Kyrgyz Republic | Tajikistan | Uzbekistan
Publication Date: March 01, 2012
ISBN/ISSN: 9781475502497/1018-5941 Format: Paper
Stock No: WPIEA2012086 Pages: 26
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