EFSD Working Paper WP/20/1 «Kyrgyz Republic Debt Sustainability and External Shocks»

30 January 2020

The baseline scenario suggests that the dynamics of external and public debt would remain sustainable. External debt, which includes both private external debt and public external debt, is expected to decline from 83.8% of GDP in 2018 to 76.5% of GDP in 2024. The total public debt (includes domestic and external government debt) will go down from 56.0% to 52.1% of GDP in 2024, reflecting the favourable growth/interest rate differential (that is, we expect growth rates to be higher than interest rates). Nonetheless, the debt outlook in Kyrgyzstan remains fragile. Thus, the EFSD Chief Economist Group examined the resilience of the Kyrgyz debt under three stress-scenarios: (1) a global recession, (2) a financial crisis, and (3) the combination of a global recession and a financial crisis.