To support economic growth, Kyrgyzstan has to solve problems with COVID-19 and trade disruptions. New Asian Development Outlook 2020 by the Asian Development Bank says.
The ADB noted that the Kyrgyzstan’s economy is forecast to slow this year along with a slowdown in its growth among the country’s main trading partners amid the global COVID-19 pandemic. But at the same time, growth is expected to recover in 2021, as gold exports will increase.
It is expected that the economic growth of the republic in 2020 will slow down to 4 percent.
If the COVID-19 outbreak intensifies and borders closure continues, growth may slow down even further. The decline in imports, affecting raw materials, equipment and food products from China and other countries, will restrain manufacturing, construction and other industries dependent on imports. Growth is expected to begin in 2021, if the region recovers after COVID-19.
«Growth in the mining and manufacturing industries led to good development in 2019. And in 2020, the impact of the coronavirus pandemic is felt throughout the world. If the situation in the region is restored, which will stimulate manufacturing, construction and other sectors dependent on imports, we will see a growth next year,» Candice McDeigan, Country Director of the ADB Resident Mission in Kyrgyzstan, said.
According to forecasts, an average annual inflation rate will grow to 3.5 percent in 2020.
This will happen due to increase in prices for food and non-food products and may accelerate even more due to the closure of borders and depreciation of the Kyrgyz som to the U.S. dollar. It is expected that the National Bank will continue to focus on maintaining price stability and a flexible exchange rate and will continue currency interventions in order to mitigate sharp fluctuations in the exchange rate of som.
The ADB report says that the Kyrgyz Republic should continue to promote development and address poverty in lagging regions in order to contribute to higher and inclusive economic growth.