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Economy of Kyrgyzstan to grow by 3.4% annually in the next 2 years

Analysts expect Kyrgyzstan’s economy to grow by an average of 3.4 percent annually in 2020–2021. This is stated in the macroeconomic review of the country, prepared by the Directorate for Analytical Work of the Eurasian Development Bank.

«Kyrgyzstan’s GDP growth will reach 4 percent in 2019 due to restoration of gold production and an increase in export volumes. Compared to the previous forecast (April 2019), the assessment has not changed,» said Andrei Falileev, EDB Director for Analytical Work.

Experts note that the inflation slowdown stopped in the second quarter of 2019 amid the rising world prices for grain and meat products, as well as a limited supply of vegetables on the domestic market. The cost of a non-food basket practically did not change compared to the first half of 2018 under the conditions of a stable exchange rate of Kyrgyz som to the U.S. dollar.

Compared to April 2019, the inflation estimate was increased by 0.5 percent in 2019. The authors of the review explain the revision by a faster rise in prices in the global food market.

According to the forecasts of the EDB, inflation rate will grow to the level of 5-7 percent in the medium term.

 «The main source of risk for the Kyrgyz economy is possible worsening in external conditions, first of all, amid a slowdown in global economic growth and trade. Such a development will affect economic growth in Kyrgyzstan primarily through foreign trade and remittance channels. There is a potential to increase the investment attractiveness of the country and improve labor productivity among the internal factors that can influence the dynamics of the economy,» Andrei Falileev said.