The Ministry of Economy spoke about economic consequences of coronavirus for Kyrgyzstan.
There will be a reduction in external supply and demand, worsening of trade terms with the countries that are the main trading partners of the republic, and a reduction in domestic demand due to a slowdown in economic activity caused by a reduction in investment inflows and remittances from labor migrants (total expenditures on final consumption and gross capital formation).
In addition, a decrease in household incomes, a growth of state budget deficit, an increase in spending on implementation of measures to combat coronavirus and support for entrepreneurs and business entities that have temporarily suspended their activities are expected. There will be an increase in spending on targeted assistance to socially vulnerable segments of the population (low-income families) and stabilization of the economy.
Risk of rising prices and inflation growth also exists.
“Taking into account the state of emergency in some regions of the republic and influence of external factors on the economy, the Ministry of Economy prepared various scenarios. They provide for a reduction in consumption by 5.5%, imports – by 11.7%, exports – by 4.5% and gross investment – by 3.6%. Decrease in remittances and return of part of migrants are possible. Thus, in January, the net inflow (balance) of remittances from individuals amounted to $112.7 million and decreased by 14% YoY,” the statement says. (24.kg/Business World Magazine)