WHO BEARS THE BURDEN OF INFLATION? A COMPARATIVE ANALYSIS OF THE DISTRIBUTIONAL EFFECTS OF INFLATION ACROSS INCOME GROUPS IN CENTRAL ASIA

Inflation remains one of the most significant macroeconomic challenges affecting developing and emerging economies. While moderate inflation may facilitate economic growth and adjustment processes, persistent increases in consumer prices often generate unequal welfare consequences across different socioeconomic groups. This study investigates whether inflation disproportionately affects low-income households relative to high-income households in the five Central Asian economies: Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. The paper examines the distributional consequences of inflation through the channels of consumption structure, labor income, asset ownership, and access to financial instruments. Using comparative macroeconomic analysis and evidence from international institutions, the study demonstrates that inflation imposes a significantly larger burden on poor households because food, housing, and utility expenditures constitute a larger share of their consumption baskets. In contrast, wealthier households are better positioned to protect their purchasing power through asset diversification, financial investments, and ownership of inflation-hedging assets. The findings indicate that inflation contributes to widening income inequality and increasing poverty risks across Central Asia, particularly during periods of food and energy price shocks. The study concludes with policy recommendations aimed at strengthening social protection systems, improving inflation-targeting frameworks, and enhancing income resilience among vulnerable populations.