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Kyrgyzstan's GDP to decrease by 5.9 percent at year-end

It is expected that the drop in Kyrgyzstan’s GDP will reach 5.9 percent at year-end. The monthly macroeconomic review of the Eurasian Development Bank says.

It is noted that a decrease in the production of basic metals by 27.8 percent and a deepening recession in construction contribute to the scale of economic decline in Kyrgyzstan.

At the same time, negative dynamics persists in most of the manufacturing industries, with the exception of pharmaceuticals (growth doubled) and the chemical industry (4.6 times). Agriculture continued to demonstrate positive dynamics. Decline in retail trade slowed down.

«Decline in investment volumes has persisted for the seventh month in a row against the background of the suspension of work on existing projects due to the pandemic. According to Centerra Gold Inc.’s expectations, the volume of gold produced at Kumtor deposit by the end of 2020 will be lower than a year earlier. The recovery of activity in other sectors is hampered by the increase in the number of cases of COVID-19, as well as barriers to transporting goods at the border with China,» the document says.

At the same time, experts are confident that the downward trend in Kyrgyzstan’s foreign trade will continue until the end of 2020. They associate the inflation growth with the effect of transfer of weakening som to the prices of goods, an increase in demand for meat products of Kyrgyz producers from neighboring countries and the resumption of growth in world prices for grain, sugar, and vegetable oils.

Weak demand for non-food products leads to a slowdown in their cost growth.

«The rise in food prices will continue to prevail over the weak price environment in the non-food segment in the coming months, and inflation will be 5.9 percent at the year-end,» the EDB said.