April 2022. Kyrgyz Republic: Social and economic development in 2021 and medium-term prospective

06 May 2022

In 2021, in the aftermath of the COVID-19 pandemic with its negative impacts, the economy of the Kyrgyz Republic demonstrated recovery growth of 3.6%. The key drivers of the growth were retail trade, services, and industrial production. At the same time, there was a drop in agricultural production due to a drought and a decline in construction. In addition to the impact of the drought, the shock associated with the world prices for food and petroleum products pushed the growth of inflation. The National Bank of the Kyrgyz Republic responded to that by raising the key interest rate sharply. In the context of growing tax and non-tax revenues and prudent spending policies, the state budget deficit amounted to only 0.2% of GDP. The economic growth and improved fiscal position resulted in the public debt going down to 60.3% of GDP in 2021 from 67.6% a year earlier.

This macroeconomic review does not include any medium-term forecasts of the key macroeconomic indicators, as they are under revision, taking into account the potential impact of sanctions, imposed on the Russian Federation, on the economy of the Kyrgyz Republic.