The Kyrgyz Republic’s medium-term economic growth is forecast at around 3.4% a year

21 November 2019

This finding is presented in a macroeconomic review for the Kyrgyz Republic published by the Directorate for Research at the Eurasian Development Bank (EDB).

According to Andrey Falileyev, Director for Research at the EDB, Kyrgyzstan’s GDP growth is expected to speed up to 4.0% in 2019, driven by recovered gold production and increased exports. The estimate remains unchanged compared to the previous forecast made in April 2019. The EDB analysts expect the Kyrgyz economy to grow by an average of 3.4% a year in 2020-2021.

They note that inflation discontinued slowing down in the second quarter of 2019 because of an increase in the world’s prices of grain and meat products, as well as limited supply of vegetables in the domestic market. The value of the non-food basket remained virtually unchanged compared to the first six months of 2018, supported by the stable rate of exchange of the Kyrgyz som to the U.S. dollar.

Compared to the previous forecast (April 2019), the inflation estimate for 2019 was increased by 0.5 percentage points. The authors explain this revision by a speedier than expected increase in the world’s food prices. The EDB predicts medium-term inflation to rise to the target corridor (5.0-7.0%).

Andrey Falileyev estimates the seven-day REPO rate in the Kyrgyz som to be within the 3-4% corridor in 2019-2020 and stimulate economic activity. In the medium term, the rate may be increased as inflation will accelerate.

The main risk for the Kyrgyz economy is the possible worsening of the external environment associated primarily with a slowdown in the global economy and trade. This may affect the country’s economic growth, predominantly via the foreign trade and money remittances channels. The internal factors that may influence economic development rates include, according to the EDB analysts, the potential for improving the nation’s investment attractiveness and labour productivity.

Additional Information: 

The Eurasian Development Bank (EDB) is an international financial institution founded by Russia and Kazakhstan in January 2006 with the mission to facilitate the development of market economies, sustainable economic growth, and the expansion of mutual trade and other economic ties in its member states. The EDB's charter capital totals US $7 billion. The member states of the Bank are the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Kyrgyz Republic, the Russian Federation, and the Republic of Tajikistan. 

The EDB Media Centre:

Alexander Savelyev +7 (985) 765 23 59 (Moscow)          

Azima Sapargaliyeva +7 (777) 750 00 08 (Almaty)

Sergey Gorbachev +7 (916) 727 22 00 (Moscow)  

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