Kyrgyz Republic Economic Update No. 1, Spring 2015 : Adjusting to a Challenging Regional Economic Environment
Growth in the Kyrgyz Republic slowed significantly in 2014, reflecting the deteriorating external environment and supply-side constraints. Economic growth fell to 3.6 percent in 2014 from 10.9 percent in the previous year, partly because exports to...
| Main Author: | |
|---|---|
| Format: | Report |
| Language: | English |
| Published: |
World Bank, Washington, DC
2021
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/741101611290294918/Kyrgyz-Republic-Economic-Update-Adjusting-To-a-Challenging-Regional-Economic-Environment http://hdl.handle.net/10986/35041 |
| Summary: | Growth in the Kyrgyz Republic slowed
significantly in 2014, reflecting the deteriorating external
environment and supply-side constraints. Economic growth
fell to 3.6 percent in 2014 from 10.9 percent in the
previous year, partly because exports to Russia and other
neighboring countries plunged. Re-export businesses were
affected as the Eurasian Economic Union (EEU) began to
exercise stricter border control on goods imported from
third countries. On the supply side, lower production at the
Kumtor gold mine and a poor harvest due to adverse weather
also depressed growth. The fall of the Russian ruble and the
Kazakh tenge led to a significant depreciation of the Kyrgyz
sum, which together with increases in energy tariffs drove
inflation up from 4 percent in 2013 to 10.5 percent in
December 2014. Although export growth was negative (–6.4
percent), imports declined even more (–7.2 percent), which,
together with lower income outflows, helped to reduce the
current account deficit from 15 percent in 2013 to 13.7
percent of GDP. The current account deficit was financed by
borrowing and foreign direct investment (FDI). On the fiscal
side, slower growth affected tax revenues, which were
essentially flat at 25.3 percent of GDP but non-tax revenues
went up by over a percentage point of GDP, to 6.7; together
with grants, that brought total revenues to just under 35
percent of GDP. Meanwhile, a significant expansion of public
investment spending brought the deficit to an estimated 4.1
percent of GDP in 2014, up from 3.9 percent in 2013, despite
less spending on recurrent outlays. Higher spending and the
depreciation of the sum translated into a significant
increase in public debt, from 46.1 percent of GDP in 2013 to
53 percent for 2014. Job creation was stagnant. Poverty
remained high: the most recent (2013) national estimates are
absolute poverty 37.0 percent and extreme poverty 2.8 percent. |
|---|