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Budget of Kyrgyzstan 2018. Everything you need to know about it

The Ministry of Finance submitted to the Parliament the budget of the republic for 2018. There are no innovations in the project. Expenses are traditionally growing, and most of the money will be spent on the social sphere. 24.kg news agency studied the document and presents its main parameters.

What shall we live on?

The draft budget of Kyrgyzstan is based on the forecast of data on economic development. So, the country’s GDP will continue to grow. The services sector will demonstrate stable growth at 3.8 percent in the coming year, construction - at a record 10.5 percent, and agriculture - at 3.2 percent.

But the forecast for industrial production is not that rosy. In 2018, a decline of 0.4 percent is expected. The Ministry of Economics explains this by the expected decrease in production at Kumtor mine. And then it promises that without the mine, the indicator will be positive: growth by 9.4 percent.

The most significant share in the GDP structure is occupied by the services sector — 50.8 percent. This means that the economy of Kyrgyzstan has not been reformatted for two years of membership in the Eurasian Economic Union. The share of industry is only 16.3 percent.

As for the rest of the macroeconomic indicators, no significant changes are expected here. In the structure of foreign trade turnover, the import is still dominating. The indicator of net exports of goods and services is projected at 53.9 percent of GDP. In material terms, the volume of exports is expected at $ 1.65 billion, and imports — $ 4.15 billion.

If to talk about social indicators, then the GDP per capita in 2018 will be $ 1,240.3. The average monthly salary is 16,577.8 soms, and the subsistence minimum is 5,185.4 soms.

How much will the treasury receive

The revenues of the republican budget in 2018 will amount to 142.6 billion soms, or 26.5 percent of GDP. In comparison with the budget of 2017, they will grow by 15.7 billion soms. At the same time, tax revenues will amount to 106 billion soms, and non-tax revenues — 21.9 billion.

The most significant revenues are expected from the payment of value added tax — 52.5 million soms. And the least is planned to get from the excise tax on goods imported to Kyrgyzstan from third countries (255.7 million), licenses (318.2 million), transport taxes (797.5 million) and immovable property (804.5 million soms).

The main share in non-tax revenues is taken by the funds of budget-funded institutions, accumulated on special accounts. In 2018, the figure is expected at the level of 10.5 billion soms. Dividends from state blocks of shares will amount to 3.3 billion soms.

Another item of income is the receipt of official transfers. In 2018, the republican budget will receive 14.7 billion soms. At the same time, the Ministry of Finance noted: in 2019-2020, revenues will decrease due to a decrease in the proceeds of grants under the state investment program.

Not going to save money

In 2018 Kyrgyzstan will continue to spend a lot. The total volume of expenditures of the republican budget is expected at the level of 162.8 billion soms, or 30.3 percent of GDP. Compared to the current year, expenditures will grow by 12.7 billion soms.

Budget of 2018 remains socially focused. The lion’s share of expenditures (82.2 billion soms) falls on the social sphere. The most significant expenditure — 33.2 billion soms — is social protection.

To service the public debt in 2018, it is planned to spend 25.6 billion soms. Expenses for repayment of the principal amount of external and internal debt vary by one billion soms. According to the forecasts of the Ministry of Finance, next year 8.8 billion soms will be spent on the main external debt, internal — 9.8 billion.

In the structure of external debt, payments in US dollars predominate — 87.2 percent. The Finance Ministry noted that in case of a sharp increase in the US currency and a rise in the cross-rate of other currencies against the dollar, there is a risk of a shortage of budget funds to service the external debt.

As a result, the deficit of the republican budget is expected at the level of 20.3 billion soms, or 3.8 percent of GDP.

There are sources of financing for its coverage. Money will come from external sources. These are loans on state investments and program loans.

In general, the draft republican budget for 2018 is characterized by a social orientation, a great dependence on external sources of financing, a significant deficit, the need to keep the state debt, and a weak system of borrowing from domestic sources.

The budget doesn’t have enough funds to implement economic projects. And local budgets are heavily dependent on the republican budget.

Now the budget is under consideration of the Parliament in the first reading. It is the Parliament that approves the main financial document of the republic. But it will be signed by the new president Sooronbai Jeenbekov.