The International Monetary Fund (IMF) said on November 8 that it expects Kyrgyzstan's economy to grow less than previously anticipated in 2017 due to its diplomatic spat with neighbouring Kazakhstan, which has disrupted trade.

"In terms of macroeconomic indicators this year, we are projecting growth to be at about 3.2 percent," Edward Gemayel, the head of an IMF mission to Kyrgyzstan, told reporters. "We did revise it a little bit downward from 3.5 percent because of the tensions on the border with Kazakhstan and the slow trade movement between the two countries."

The ongoing political dispute between Kyrgyzstan and Kazakhstan started with Astana tightening Kyrgyz border controls following accusations that Kazakhstan tried to meddle in Kyrgyzstan’s October 15 presidential election.

The border restrictions have supposedly almost halved the flow of trade between the two Central Asian countries since Kazakh border guards started singling out Kyrgyz cargoes for inspections on October 10. On October 24, Kyrgyzstan announced it would be cancelling $100mn in grant aid it had agreed to receive from Kazakhstan.

The dispute stems from Kyrgyz President Almazbek Atambayev publicly accusing Kazakhstan of openly supporting ex-prime minister Omurbek Babanov in the race for the presidency. The accusation followed Kazakh President Nursultan Nazarbayev meeting with Babanov on September 19. Babanov subsequently lost the election and Atambayev apologised for his remarks. Atambayev is due to step down to make way for his successor Sooranbai Jeenbekov.

Gemayel added that the IMF expects the dispute to be resolved by the end of 2017. Otherwise, the IMF might revise its 2018 outlook from the current 3.3%.