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August results. Economic slowdown continues in Kyrgyzstan

Kyrgyzstan’s GDP is falling for the second consecutive month along with the volume of industrial production. But prices are practically not rising. They have even decreased for some positions since the beginning of the year.

Golden swings of economy

According to the results of January-August 2018, the GDP of the country formed in the amount of 310,267.2 billion soms. This is 0.3 percent less than last year. At the same time, without taking into account the enterprises developing Kumtor mine, the indicator is more optimistic: 282,686 billion soms with 2.1 percent growth.

Service industries accounted for the largest share in the structure of GDP — more than 46 percent. The share of industry is slightly more than 19 percent, agriculture — 11.5 percent, construction — about 7 percent.

This year, it is extremely difficult to keep the economic growth at the level of 2017. The fact is that the country’s economy depends very much on the largest gold mining enterprise Kumtor. Gold mining at the enterprise is cyclical. In 2016, poor ore was mined that has led to a sharp decline in the economy. But more gold has been mined in 2017, so the final economic indicators were not bad.

The situation of 2016 repeats now, when the gold production at Kumtor fell 1.65 times. The volume of production of the precious metal in the second quarter of 2018 amounted to 83,803 ounces, and in 2017 — 138,623 ounces.

Such dependence on one enterprise led to a slight GDP growth in the first half of 2018, and it began to fall since July.

When textiles help

Kyrgyzstan had the best industrial production growth rates in the Eurasian Economic Union in 2017. But it was connected again with a sharp increase in the volume of mining. This year production is lower, and the volume of industrial production decreased.

According to the results of eight months of 2018, it amounted to 146,063.2 billion soms. Compared to the same period of 2017, the indicator fell by 9.3 percent.

Without taking into account the enterprises developing Kumtor, the republic produced industrial goods for 98,168.5 billion soms that is 2.9 percent more than last year. The textile industry does not allow the production sector to completely collapse.

A record growth of 1.5 times compared with 2017 was registered in textile industry.

Kyrgyz garment workers have been working clearly, smoothly and consistently for many years. They survived many crises, and began to increase production volumes with the accession of Kyrgyzstan to the Eurasian Economic Union.

Expensive cigarettes, more affordable products

Prices have fallen by 1.2 percent since the beginning of the year in Kyrgyzstan. In August, they fell by other 0.4 percent. Food products fall in price, but alcohol becomes more expensive.

Since the beginning of the year, prices have decreased in almost all regions of the republic.

They have not changed in Osh region, and in Naryn — rose by 1.8 percent. The maximum growth in tariffs for services was recorded in Bishkek (6.2 percent), and prices for alcohol and tobacco products — in Talas region (9.5 percent).

Growing wages

According to the National Statistical Committee, the average salary in Kyrgyzstan reached 15,765 soms. In comparison with 2017, the indicator grew by 6.7 percent.

The increase in salaries was observed at enterprises and organizations of all types of economic activity, except for hotels and restaurants.

An average monthly salary grew most of all in construction (16.6 percent) and in the sphere of other services (18 percent).

In addition, salaries have also increased in information and communication (16.2 percent), public administration and defense, compulsory social security (12.9 percent), wholesale and retail trade, car and motorcycle services, professional, scientific and technical activities (9.9 percent), operations with real estate (9.7 percent).

About 68,800 unemployed people were registered in the republic that is 9.9 percent more than in 2017.