September 2020. Kyrgyz Republic: Recent social and economic trends and short-term prospective

In the first half of 2020, the Kyrgyz economy was negatively affected by the COVID-19 pandemic and other external shocks. The impact of the spread of COVID-19 on the economy of the Kyrgyz Republic began to manifest itself through the foreign trade channel. The decline in global demand and production led to a reduction in foreign trade turnover, investment and remittances, which affected the weakening of the Som exchange rate. Quarantine (lockdown) measures that have been in place since March 2020 due to the spread of the COVID-19 pandemic increased uncertainty and have led to a sharp reduction in economic activity and rising prices. As part of the coordinated support of key donors to counter the impact of the COVID-19 pandemic on the economy, financial and social sectors, the EFSD Council approved the provision of funding to support the budget of the Kyrgyz Republic in the amount of the USD 100 million. For the remainder of 2020, the Kyrgyz economy will be affected by uncertainties about the likelihood of a new wave of the COVID-19 pandemic and the speed of recovery in economic activity. In the absence of a new wave of the COVID-19 pandemic, the gradual removal of restrictive measures and financial support from the state will allow the private sector to reduce the rate of economic decline by the end of this year, and in 2021 – to move to a positive recovery growth rate.

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