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March results. Dependence of Kyrgyzstan’s economy on gold persists

In the first quarter of 2019, the economy of Kyrgyzstan showed a good growth. However, it is, to a greater extend, associated with an increase in gold production. This is proved by an increase in gold exports.

Prices in the country practically do not grow. At the same time, the National Statistical Committee still registers a rise in prices of fresh vegetables and soft drinks. But the price of potatoes, milk and apples is falling.

Golden effect

In January — March 2019, Kyrgyzstan’s GDP was 104,527.3 billion soms. Compared with 2018, it grew by 5.3 percent.

March fell short of the January economic growth figures. Compared with the first month of 2019, GDP growth slowed down by 1.1 percent. However, compared with February, there is a growth of 0.4 percent.

Growth is understandable, but this is not about positive trends in the economy, rather, on the contrary, they prove its serious dependence on the volumes of minerals extraction.

A low base effect is evident. Simply put, in 2018, the first half of the year did not show a good performance due to a significant decline in gold production at Kumtor. Since the end of 2018, mining of ore rich in the precious metal started at the mine. This immediately influenced and still influences the economy.

But the growth of the economy without Kumtor was quite high last year. And a comparison of GDP indicators shows that we don’t have any significant growth.

Excluding enterprises for the development of Kumtor mine, the country’s GDP in January-March 2019 amounted to 90,711.8 billion soms. This is only 1.4 percent more than in the first quarter of 2018.

Mining of ores and coal

Good performance at Kumtor immediately influenced the volume of industrial production. It grows steadily. But, in contrast to 2018, the entire mining sector makes a significant contribution to production growth.

Thus, according to the results of January — March 2019, industrial products for 64,145.2 billion soms were produced in Kyrgyzstan. Compared to the same period of 2018, the figure increased by 4.2 percent.

The growth in industrial production in January-March 2019 was due to an increase in the production of metal ores (2.2 times), coal (by 29.5 percent), crude oil and natural gas (by 16.9 percent), production of base metals (by 40.1 percent), clothing (by 29.2 percent), other non-metallic mineral products (by 9.3 percent).

Without taking into account the enterprises developing Kumtor mine, indicators in the industry are not joyful at all. Products were manufactured for 33,843.9 billion soms with a fall of 6.3 percent.

Production of petroleum products in March decreased (by 47.3 percent) along with a decline in the textile industry (by 10.9 percent), in the production of rubber and plastic products (by 7.1 percent), food products (by 8.1 percent), wood processing and production of wood and cork products (by 8.6 percent).

Vegetables are rising, potatoes are falling in price

In March 2019, prices and tariffs decreased in the republic as a whole by 0.3 percent. In particular, the price of non-food products (by 0.7 percent), services (by 0.4 percent) and alcoholic beverages (by 0.2 percent) dropped. And food and non-alcoholic beverages grew in price by 0.1 percent.

In March, an increase in consumer prices and tariffs (by 0.2 percent) was recorded only in Chui region.

Compared to December 2018, prices and tariffs for consumer goods and services in the republic as a whole did not change. But food and non-alcoholic beverages grew in price by 0.4 percent, and tobacco products — by 11.6 percent.

Non-food goods (by 1.2 percent), services (by 0.8 percent) and alcoholic drinks (by 0.1 percent) dropped in price.

Since the beginning of the year, the maximum increase in prices and tariffs (0.7 percent) was registered in Chui and Naryn regions. This is due to a significant increase in prices for food products and non-alcoholic beverages by 2.1 percent and 1.9 percent respectively.

At the same time, in January-March 2019, prices dropped in Osh (by 0.6 percent), Osh (by 0.5 percent) and Batken (by 0.1 percent) regions.

Who earns more?

According to the National Statistical Committee, an average salary in Kyrgyzstan is 15,226 soms.

In January-February 2019, the growth of an average monthly salary was observed at enterprises and organizations of all types of economic activity, with the exception of enterprises and organizations in the sphere of professional, scientific and technical activities, as well as other service activities.

At the same time, the salary of employees of not budget-funded organizations exceeded the salary of state employees 1.8 times.

In the first quarter of 2019, the subsistence minimum in Kyrgyzstan amounted to 4,681.31 soms, for pensioners — 4,168.37 soms.