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EDB: Low-water season has limiting impact on Kyrgyz economy

GDP growth in Kyrgyzstan will reach 3.9 percent by the end of 2021. Experts from the Eurasian Development Bank make such a forecast.

The estimate has not changed compared to the previous forecast. Economists suggest that a more active global economic recovery is offset by the increased risks of socio-political instability in the region. This affects both the disposal of accumulated capital (buildings and structures), and will make an even greater contribution to deterring future investments.

The low-water season will have an additional limiting effect, which may negatively affect the energy sector and agriculture.

«Economic growth in 2021 will be largely driven by a significant relaxation of sanitary restrictions compared to the previous year. The key growth driver will be the services sector, where high recovery rates of growth should be expected against the background of the low base of the previous year. The projected increase in the inflow of remittances will support domestic demand,» the experts say.

At the same time, they stress that the weakening of quarantine measures in countries — trading partners can have a positive effect on Kyrgyz supplies abroad.

Tourism activity is likely to remain subdued due to continued restrictions on cross-border movement.

Growth in economic activity will also be limited by restrained investment demand amid high uncertainty and planned fiscal consolidation. At the same time, in the baseline scenario of the forecast, the EDB experts believe that the imposed external management at the Kumtor mine will not change the long-term production plans of the enterprise.

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