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World Bank tells about risks for economy of Kyrgyzstan and GDP growth

The World Bank forecasts GDP growth of Kyrgyzstan in 2024 at 4.5 percent. The updated economic forecast of the World Bank for developing countries in Europe and Central Asia says.

Previously, the World Bank expected the republic’s economic growth this year to be slightly lower — at 4 percent. The forecast for 2025 was also increased from 4 to 4.2 percent.

The World Bank noted that growth could be higher if the process of implementing structural reforms is accelerated.

«GDP growth is expected to slow down to 4.5 percent in 2024 as growth in the services sector slows. As for the demand, consumption growth will slow down despite a slight increase in remittance inflows, while investment and net exports are expected to support growth. In the medium term, GDP growth is expected to slow down annually due to a lack of structural reforms to boost potential growth,» the World Bank said in its forecast.

In addition, the World Bank believes that with reasonable monetary policy of the National Bank and stable prices for fuels and lubricants and food on global markets, inflation will decline to the National Bank target of 5-7 percent by the end of this year. It will also remain stable in the medium term.

It is predicted that the budget surplus will turn into a deficit of 1.6 percent of GDP in 2024 due to a decline in tax revenues. However, the figure could rise to 2.4 percent of GDP by 2026, mainly due to higher capital spending.

«There are external risks to growth, mainly driven by the geopolitical situation and the state of trade flows with Russia. There may be a noticeable deterioration in the state of the Russian economy and, as a result, a reduction in the volume of remittances and exports. Possible surges in global food and fuel prices could reverse the downward trend and push inflation to double-digit levels. Increasing potential economic growth will require bold reforms to improve governance and reduce corruption, remove administrative barriers to private sector development, and improve the energy sector through tariff adjustments,» the World Bank concluded.