GDP of the Kyrgyz Republic will fall by 10% in 2020 due to the coronavirus pandemic. The joint socioeconomic assessment “COVID-19 in the Kyrgyz Republic: Socioeconomic and Vulnerability Impact Assessment and Policy Response”, prepared by the Asian Development Bank, the United Nations Development Programme and the Economic Policy Research Institute in the Kyrgyz Republic’s Ministry of Economy says.
As a result of the pandemic, the republic faced significant losses in the main sectors of the economy – tourism, trade, consumer services and construction.
Receipts from the export of tourism and travel services, which represented 5.6% of GDP in 2018, have been forecast to almost disappear in 2020, with revenue fall of 90% predicted.
The Kyrgyz Republic is also reliant on remittances from labor migrants, and these revenue inflows fell by 25% in January-May. Continued downward trends, estimated at 20%-25% over the course of 2020 and beyond, mean that the decrease in remittances might amount to 4-5% of GDP.
Experts predict that the country’s GDP will fall by 10% this year (a 5.3% decline was reported for January-June).
The most-affected sectors of the economy will be tourism, trade and consumer services and construction – each of which can expect contractions in gross value added of 20% or more.
Assuming only conservative growth in labor supply, it is estimated that the Kyrgyz Republic’s unemployment rate will rise to 13.6% in 2020. However, if there is a worst-case increase in labor supply, the unemployment rate could jump to 21%. (24.kg/Business World Magazine)