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May results. Gold pulls economy of Kyrgyzstan to the bottom

Gold production figures in 2018 is lower than the last year indicators. This has already affected the economic situation. GDP growth slowed down due to a fall in the volume of mining. But there is good news for the citizens of Kyrgyzstan: prices in the country practically do not grow, and even fall for some goods.

Oddities of GDP

Over five months, Kyrgyzstan’s GDP amounted to 170,754.8 billion soms. In comparison with 2017, the indicator grew by only 0.7 percent.

It should be noted that the highest growth rates in the economy of Kyrgyzstan were recorded in February, when GDP growth was 2.7 percent.

The services account for the main share in the structure of the gross domestic product — 47%. Industry occupies 22 percent, agriculture — just over 7, construction — more than 6 percent.

Without taking into account the enterprises developing Kumtor mine, which is the main producer of gold in Kyrgyzstan, the GDP growth was 2.5 percent compared to 2017.

When mining is a burden

Since the beginning of the year, the volume of industrial production in Kyrgyzstan amounted to 90,805.4 billion soms. This is 3.3 percent less than in January-May 2017. The National Statistical Committee noted that the decline in production was caused by a reduction in the mining of metal ores, the production of vehicles, machinery and equipment, basic metals.

The volume of industrial products, excluding enterprises for the development of Kumtor, amounted to 57,684.7 billion soms. Compared to the previous year, it grew by 7.1 percent.

It is worth noting that in 2017, Kyrgyzstan was the best in the growth of industrial production among the countries of the Eurasian Economic Union. But it was achieved mainly due to a significant increase in the extraction of minerals. In 2018, this sphere, on the contrary, became an obstacle for the development of the industry.

The textile production (1.7 times growth), production of rubber and plastic products, other non-metallic mineral products (growth of 30.4 percent), oil products (growth of 38.3 percent) and clothing — 29.5 percent) demonstrate strong and stable growth rates.

Prices braced for

Since the beginning of the year, the growth in the prices and tariffs in the republic has made up only 0.1 percent. In May, prices fell by 0.5 percent.

In five months, the maximum increase in consumer prices and tariffs was registered in Naryn region (2.4 percent). But they fell in Batken region and Osh (by 2.7 and 0.2 percent respectively).

As a result of May, the average salary in Kyrgyzstan was 15,320 soms, which is 7.3 percent more than the indicator of 2017. Most of all, wages rose in the sphere of information and communications — by 22.2 percent, other servicing activities — by 21.6 percent, construction — by 18.6 percent.

In 2018, the minimum wage in Kyrgyzstan was set at 1,662 soms.

«Despite the fact that the excise tax on tobacco products and tariffs for communication services were raised in the first quarter, a weak price situation in the world and regional food markets kept annual inflation below the target corridor. Absence of external shocks and a stable exchange rate of the national currency create prerequisites for preserving a weak inflationary background in the first months of the second quarter,» experts of the Eurasian Development Bank explained the situation.