The European Bank for Reconstruction and Development (EBRD) predicts economic growth in Kyrgyzstan in 2023 at 7 percent. The EBRD’s Regional Economic Prospects report says.
In February 2023, the bank gave a similar forecast for the economic growth in the Kyrgyz Republic. The forecast for 2024 also remained unchanged at 7.2 percent.
The EBRD notes that the economy of Kyrgyzstan grew by 7 percent last year, despite a significant drop in gold exports. But the growth in demand for labor migrants in Russia, the massive relocation of Russian capital and highly skilled labor from the Russian Federation, and a significant increase in intermediary trade offset the adverse effects of the war in Ukraine.
Growth continued in the first quarter of 2023. At the same time, strong external and domestic demand, growth in industrial production (7.6 percent year on year), hotel business (24.1 percent), retail and wholesale trade (11.8 percent) and road transport (18.7 percent) were registered. Imports grew by 27.2 percent in January — February 2023 due to higher food and energy prices, as well as an increase in re-exports.
The EBRD also noted an increase in truck imports in the first two months of 2023.
The bank believes that such indicators reflect the greater role of Kyrgyzstan in transit and intermediary trade. In general, the republic’s real GDP grew by 4.6 percent year-on-year in the first quarter of 2023, despite a 34 percent decline in net remittances.
«In the short term, the economy of Kyrgyzstan will continue to benefit from expanded re-export opportunities, an increase in remittances from Russia and the relocation of Russian companies and citizens, including IT professionals and entrepreneurs. Investments in large energy and infrastructure projects such as Kambar-Ata HPP-1 and China — Kyrgyzstan — Uzbekistan railway are likely to support growth in the medium term. Nevertheless, the risks associated with tightening credit conditions and dependence on remittances from the Russian Federation persist,» the EBRD notes.
