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Economic slowdown caused by Kyrgyzstan forecasted in Central Asia

Economic growth in Central Asia is expected to decline from an average of 4.8 percent in 2017 to 4.6 percent in 2018. Report «Regional Economic Prospects» of the European Bank for Reconstruction and Development says.

It is noted that the slowdown reflects the need for financial consolidation and is caused by a sharp drop in gold production in Kyrgyzstan. In 2019, growth is expected to be even more moderate — 4.2 percent. This is caused by lower mining profits and higher inflation, which will limit real income growth and private consumption.

After a strong growth in 2017 (4.6 percent), the economy of Kyrgyzstan slowed down in 2018 to 1.2 percent, as gold production at Kumtor declined.

«A significant profit from mining in the fourth quarter of 2018 will help raise GDP growth rates to 2.8 percent in 2018.» At the same time, the deficit of foreign trade turnover increased due to the fall in export and import growth rates. At the same time, the inflow of remittances increased by 8 percent and strengthened," the report says.

It is expected that GDP growth in Kyrgyzstan in 2018 will be 2.7 percent, and in 2019, it will reach 3.2 percent.

«Growth in exports of goods to the Eurasian Economic Union, as well as an increase in remittances is also expected. The main risk factors are slower than expected rates of recovery of mining industry and a weaker than expected growth of the Russian economy,» EBRD sums up.