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What IMF recommends for sustainability of Kyrgyz budget

The IMF mission completed the review of the macroeconomic situation in Kyrgyzstan. As a result, the head of the mission, Edward Gemayel, voiced recommendations for improving the situation with the sustainability of the budget.

Experts of the international organization recommended the Cabinet to take measures in four areas. First and foremost, increase tax collection by limiting exemptions, which are quite high in Kyrgyzstan today. The IMF is confident that it is worth repealing or not providing some tax exemption and benefits.

The second sphere is the payroll fund. It should also be cut.

At present, the payroll fund reaches 9.5 percent of GDP. This is one of the highest indicators in the Central Asian region.

«The authorities have already prepared a plan to curb the growth of the payroll through various reforms. The third area where changes are needed is the volume of subsidies. Discussions on this issue continue. Another area that requires special attention is the improvement of the social protection system, so that assistance is more targeted,» Edward Gemayel said.

At the same time, discussions on all groups of issues between the government of Kyrgyzstan and the IMF are held after the deviations in the budgetary sphere that have occurred in the last six months. Thus, on the eve of the election, the government undertook one-time large expenditures amounting to 4 percent of GDP. In addition, from January 1, 2018, permanent measures of social support will be introduced in the form of a general allowance for children, increasing salaries, pensions and benefits.

«These policy measures, both one-time and permanent, affect the state of budget. If not to take action, they can affect the sustainability of the debt situation and the budget. So now we are discussing possible actions with the government. We hope that an agreement will be reached next week,» Edward Gemayel concluded.