The Eurasian Development Bank predicts 1.5% slowdown in the Kyrgyz economy.
Tight monetary conditions may restrain economic growth in the Kyrgyz Republic. The slow pace of gold production’s increase is among the deterrent internal factors. Weakening of som exchange rate in the fourth quarter of 2015 helped smooth the increasing pressure by improving the trade balance and the price competitiveness. As a result, in 2016 partial switching of consumer demand to the products of domestic producers and increase in food exports is expected.
“Planned increase in the consolidated budget deficit will give an additional impetus to domestic demand in 2016-2017. It is expected that in 2016 the economic growth rate in Kyrgyzstan will slow down to 1.5%, and in 2017-2018 it will stabilize at 3.2%. Increase in tariffs for electricity and heating by 20-30% is expected in 2017-2018. However, tight monetary conditions, weak domestic demand and low world prices for food and fuel will contribute to preservation of inflation in these years at the level of 5-7%”, EDB experts commented. (24.kg/Business World Magazine)