2014年-世界发展银行全球_Kyrgyz_Republic___Growth_Rebounds_Risks_Remain_28页_1mb

Kyrgyz Republic: Growth Rebounds, Risks Remain

Core Content Summary

The Kyrgyz Republic experienced a significant economic rebound in 2013, with GDP growth reaching 10.5 percent, the highest since independence. This growth was driven by a surge in gold production from Kumtor, the country's largest gold mine, which contributed almost half of the total growth. Gold output nearly doubled compared to 2012, partly due to the low base effect after production disruptions in the previous year. Non-gold sectors, particularly construction and services, also performed well, with growth at 5.8 percent.

Key Economic Developments

• Growth Drivers: Strong gold production and robust non-gold sector expansion, especially in construction and services, were the main contributors to growth.
• Private Consumption: Private consumption remained the dominant component of aggregate demand, supported by rising wages and remittances.
• Inflation: Headline inflation slowed to 4 percent in 2013, down from 7.5 percent in 2012. This was due to lower domestic fuel prices and a decline in international food prices. Core inflation, excluding food and energy, was 7.8 percent, still elevated.
• External Accounts: The current account deficit remained large, though slightly improved compared to 2012. Gold exports helped reduce the deficit, but non-gold exports declined, and imports increased significantly.
• Fiscal Policy: The fiscal deficit was lower than projected, at 3.5 percent of GDP, due to a public sector wage freeze and improved revenue performance. However, sustainability remains uncertain due to potential wage increases and a decline in revenues from the Manas transit center closure.
• Exchange Rate: The Kyrgyz Som (KGS) faced downward pressure in 2014, with the National Bank intervening four times, compared to once in 2013. The real exchange rate is considered appropriate, but regional currency fluctuations could affect competitiveness.
• Employment Trends: There were marginal improvements in employment, with an increase in registered workers and a decrease in registered unemployed. However, labor productivity in most sectors declined between 2002 and 2012, with agriculture showing the largest improvement. Wages in the public sector were frozen, leading to a decline in real wages, while private sector wages rose.
• Poverty: Broad-based growth in 2013 suggests poverty may have stabilized. Children, the self-employed, and those outside the formal labor market are most vulnerable to poverty. Education, particularly secondary and tertiary, is linked to lower poverty risk.

Main Viewpoints

• The economy's growth in 2013 was largely due to the performance of the gold sector, which is not sustainable in the long term.
• Domestic demand, supported by remittances and credit to the private sector, is becoming more significant in driving growth.
• The labor market is evolving, with a shift from agriculture to more urban-based sectors, but labor productivity remains low in most areas.
• The Kyrgyz Republic is at moderate risk of debt distress, with external debt to GDP ratio rising slightly to 83 percent in 2013.
• Political stability has been maintained, but the country remains fragile, with ongoing tensions and unresolved issues such as the Kumtor mine and Customs Union accession.

Key Information

• Currency: Kyrgyz Som (KGS), with 1 USD = 48.6197 KGS as of September 30, 2013.
• Growth: GDP growth was 10.5 percent in 2013, with gold contributing significantly.
• Inflation: Headline inflation was 4 percent in 2013, while core inflation was 7.8 percent.
• Current Account Deficit: Remained high at 56 percent of GDP in 2013, though slightly lower than 2012.
• Fiscal Deficit: Reduced to 3.5 percent of GDP, but sustainability is uncertain.
• Exchange Rate: The nominal exchange rate faced pressure in 2014, with the National Bank intervening frequently.
• Employment: Administrative data suggests marginal improvement, but comprehensive survey data is limited.
• Labor Productivity: Declined in most sectors, with agriculture being an exception.
• Poverty: Stabilized in 2013, but certain groups such as the self-employed and children remain at high risk.

Outlook

• Medium Term Growth: Expected to moderate to 5 percent, with risks including a slowdown in the Russian economy, declining gold prices, and exchange rate fluctuations.
• Policy Focus: Structural reforms and fiscal and monetary policies are critical to sustaining growth and improving economic stability.
• Investor Confidence: The resolution of the Kumtor issue and the increase in FDI may help maintain investor confidence.
• Debt Risk: The country remains at moderate risk of debt distress, with the need for continued monitoring and policy adjustments.