2012年-IMF国际货币组织全球_Kyrgyz_Republic_Second_Review_Under_the_Three_79页_1mb

Kyrgyz Republic: Second Review Under the Three-Year Arrangement Under the Extended Credit Facility and Request for Modification of Performance Criteria

Core Content

This document outlines the second review of the Kyrgyz Republic's three-year Extended Credit Facility (ECF) program, conducted by the IMF staff in early 2012. It includes the staff report, press release, and request for modification of performance criteria. The review assesses the country's economic developments, program implementation, and policy discussions to determine the readiness for the third disbursement of the ECF.

Main Points

Political Context

• A new, reform-minded government was formed in December 2011 following presidential elections.
• The government prioritizes establishing a conducive business environment for investment and private-sector growth.
• Government restructuring occurred, with the number of ministries reduced from 18 to 15, and functions modified.

Economic Developments

• GDP growth was strong in 2011 at 5.7%, recovering from negative growth in 2010.
• Headline inflation dropped sharply in 2011 from over 22% to 2.4% in February 2012, but core inflation remained high at around 13% in early 2011.
• Current account deficit narrowed to 3.1% of GDP in 2011 due to strong exports and remittances, but is expected to widen in 2012.
• Banking sector improved with capital adequacy at 30% and NPLs declining to 10% of gross loans, although vulnerabilities remain.

Program Implementation

• The program is on track with all quantitative performance criteria and indicative targets for end-December 2011.
• Structural benchmarks on PFM reforms and the Banking Code were met.
• The authorities request modification of performance criteria, including replacing the Zalkar bank privatization benchmark with two new ones to increase privatization chances.
• The Banking Code is being developed with support from the LEG mission, and the resolution of banks under conservatorship is ongoing but delayed due to legal issues.

Key Policies and Reforms

Fiscal Policy

• Fiscal deficit in 2012 is expected to be lower than initially projected, but still at 4.6% of GDP.
• Tax revenues are expected to rise by 1% of GDP due to improved administration and policy measures.
• Discretionary current spending is being reduced, while capital expenditures are projected to increase due to the energy infrastructure project.
• Civil service reform is expected to generate fiscal savings of 0.3% of GDP through retrenchment and disposal of assets.
• Privatization of state assets, including the Affordable Loans for Farmers (ALF) program, is ongoing but delayed.

Monetary Policy

• The National Bank of the Kyrgyz Republic (NBKR) maintains a tight monetary policy to control core inflation.
• The real policy rate was 8% in February 2012, up from negative 14% in end-2010.
• The NBKR is prepared to tighten policy further if inflationary pressures persist.
• Foreign exchange interventions are limited to smoothing volatility, and foreign reserves are being built up.

Financial Sector Policies

• The banking sector remains vulnerable, especially due to unresolved Zalkar bank issues.
• The Banking Code is being developed to improve the legal framework and enhance bank resolution powers.
• The SSC (second-largest bank) is receiving capital injections to support growth, but the government has committed to limit these to 250 million soms.
• Contagion risks from foreign bank subsidiaries are being monitored, and contingency measures are in place.

Medium-Term Outlook and Risks

• Growth is expected to decline to 5% in 2012, but rebound to 5.5% in 2013–14.
• Inflation is projected to be 8% in 2012 and 7% over the medium term.
• Current account deficit is expected to rise to 4.8% of GDP in 2012 before declining to 3% in the medium term.
• Downside risks include:
  • Political instability from potential cabinet changes or policy slippages.
  • External shocks such as a global downturn or higher oil prices.
  • Delays in gold production could reduce revenues.
  • Contagion effects from the European crisis on the banking system.
  • Uncertainty in Zalkar bank resolution and ongoing legal challenges.

Key Documents and Attachments

• Letter of Intent (LOI) and Technical Memorandum of Understanding (TMU) are included.
• Text Tables cover financial soundness indicators, budget performance, and balance of payments.
• Boxes provide insights into core inflation and the medium-term development program (MTDP).
• Figures and Tables summarize economic indicators, monetary survey, and government finances.

Summary of Key Requests

• Request to replace Zalkar bank privatization benchmark with two new ones.
• Request to delay the Banking Code benchmark to end-March 2013.
• Request to increase the nonconcessional external debt limit from US$150 million to US$400 million.
• Request to save 70% of ACF financing for treasury replenishment.

Conclusion

The Kyrgyz Republic is on track with its ECF program, but challenges remain, particularly in financial sector stability, political implementation, and external risks. Continued fiscal discipline, monetary tightening, and reforms in public financial management and the banking sector are critical for macroeconomic stability and debt sustainability. The authorities are seeking IMF support to modify performance criteria and address ongoing structural issues.