May 2023. Kyrgyz Republic: Social and Economic Developments in 2022

The economy of the Kyrgyz Republic has shown resistance to external shocks associated with the volatility of world energy and food prices, the disruption of transport and logistics chains, and the volatility of exchange rates of the national currencies of major trading partners against the background of an aggravated geopolitical crisis. The economic growth accelerated to 7.0% in 2022, due to increased gold production and the impact of new economic conditions on the economy. The migration of capital and people, mainly from the Russian Federation, had an impact on the growth of domestic demand, which put pressure on inflation. An additional factor contributing to higher domestic demand and inflation was a weaker fiscal position associated with higher government expenditures on labour and capital investment. Although the actions of the NB KR facilitated the stabilisation of the exchange rate and maintained the stability of the banking sector, inflation accelerated by the end of the year, among other things, as a result of monetary operations.

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