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Aging-related spending represent particular challenge for Kyrgyzstan

Aging-related spending represent particular challenge for Kyrgyzstan. The conclusion is contained in the Moody’s Investors Service report «Sovereigns — Commonwealth of Independent States: Divergence in working-age population trends will shape credit profiles.»

As the Moody’s Investors Service reports, the demographic outlook remains adverse for countries in the Commonwealth of Independent States (CIS), which have experienced a significant deceleration in economic growth over the last decade as working-age populations have contracted.

The economic strength of Belarus (B3 stable), Moldova (B3 stable), Ukraine (Caa2 positive) and Armenia (B1 positive) is most vulnerable to changing demographics, while the Kyrgyz Republic (B2 stable) is most exposed to their credit-negative fiscal implications.

Healthcare and pension costs tend to mount as populations age, raising overall government expenditure and reducing fiscal flexibility. Aging-related spending will increasingly strain government budgets across the region.

«It will represent a particular challenge for the Kyrgyz Republic, where the 60-plus population is growing extremely fast compared with the working-age population, and counteracting reforms are relatively narrow in scope,» the report says.