Kyrgyz growth to remain weak amid regional slowdown, says IMF

By bne IntelliNews September 29, 2016

Kyrgyzstan’s growth this year will remain weak at 2.3% as a result the regional slowdown, but the economy should improve over the medium term as the country’s main trading partners see recovery in growth, the International Monetary Fund (IMF) said on September 28.

Despite moderating since the beginning of 2016, the economy is still “held back” by external pressures, the fund said in a statement following its visit to Bishkek on September 15-28. Growth excluding gold production at the Kumtor mine, the largest contributor to the economy, reached 2.1% by end-August “on the back of modest improvements in trade, construction and agriculture”. At the same time, consumer prices edged up 0.5% by the end of August due to some recovery in food and fuel prices, after venturing into deflation earlier in the year, the statement notes.  

The IMF reiterated its previous statement that Kyrgyz authorities should make efforts to increase budget revenues and control expenditures in order to keep the fiscal deficit in 2016 within the budgeted 4.5% of GDP and reduce it to 2.4% of GDP in 2017. To accomplish this, the IMF is suggesting the authorities to reverse recent VAT exemption on flour and unwind other tax exemptions.

“It will also require careful consideration of public investment projects, be they foreign or domestically financed, to ensure that only the most essential ones are selected and that they are executed in an efficient and transparent manner,” the IMF notes. The fund also re-emphasises its point that the country should refrain from unbudgeted spending in the run-up to 2017 presidential elections.

Given the recent fall in headline inflation, subdued economic prospects and the moderation of credit growth, the Kyrgyz central bank could relax monetary policy while staying on lookout for signs of fiscal and exchange rate pressures, the fund suggests. “Foreign exchange intervention should continue to be limited to smoothing out excessive volatility.”

The fund welcomes the passage of the banking law, seeing it as an “important step towards building a modern and effective regulatory framework”, but urges to strengthen it further to enhance the banking resolution framework, and the central bank’s autonomy and governance. “The mission and the authorities have made good progress toward reaching a staff-level agreement on the third review under the ECF,” the IMF concludes.

Related Articles

Fitch affirms Kazakh uranium miner Kazatomprom 'BBB-'

Fitch Ratings has affirmed the long-term foreign currency issuer default rating (IDR) of Kazakhstan's state-owned uranium miner Kazatomprom at 'BBB-' with a stable outlook. ... more

Higher rates not helping Turkish lira as it slides towards new record lows

The Turkish lira hit to a new historic low of 3.4768 against the US dollar in early trading hours of November 25, a day after the ... more

Russia's Rosneft approves $17bn worth of borrowing

Russia's state-controlled oil giant Rosneft has approved borrowing RUB1.07 trillion ($16.6bn) in 10-year foreign currency bonds, Vedomosti daily reported on November 25. ... more

Register here to continue reading this article and 2 more for free or 12 months full access inc. Magazine and Weekly Newspaper for just $119/year.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

IntelliNews Pro subscribers click here

Thank you. Please complete your registration by confirming your email address. A confirmation email has been sent to the email address you provided.

Thank you for purchasing a bne IntelliNews subscription. We look forward to serving you as one of our paid subscribers. An email confirmation will be sent to the email address you have provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

IntelliNews Pro subscribers click here

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

Thank you. Please complete your registration by confirming your email address. The confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss