2015年-世界发展银行全球_Kyrgyz_Republic_Biannual_Economic_Update_Fall_2015___Resilience_Amid_Turbulence_24页_1mb

Kyrgyz Republic: Biannual Economic Update - Fall 2015

Core Content

This Economic Update provides an overview of the Kyrgyz Republic's macroeconomic performance and outlook for the first eight months of 2015, highlighting the resilience of the economy amid external turbulence. It also includes a special focus on the challenges of job creation and labor market dynamics.

Main Points

Economic Resilience in 2015

• The Kyrgyz Republic's economy showed resilience in the first half of 2015, with real GDP growth of 6.8% year-on-year (y/y), driven primarily by frontloaded gold production (up 46% y/y) and strong agricultural performance (up 5.3% y/y).
• However, growth is expected to slow to 2% for the full year, due to a decline in gold production and adverse external conditions.

Sectoral Contributions

• Gold sector contributed significantly to growth, accounting for nearly half of the total GDP growth.
• Agricultural sector remained robust, while manufacturing and construction growth slowed.
• Service sector growth remained steady at 2.7% y/y.

Inflation and Exchange Rates

• Headline inflation dropped to 5.8% y/y in August 2015 from 10.5% y/y at the end of 2014.
• Nominal depreciation of the Kyrgyzstani som (KGS) against the US dollar and Russian ruble (RUB) increased debt exposure, with the KGS losing 19% of its value against the dollar between January and mid-September 2015.
• Real effective exchange rate declined by 8% since February, improving international competitiveness.

Fiscal Performance

• The government recorded a budget surplus of 1% of GDP in the first eight months of 2015, up from a deficit of 3.6% in the same period in 2014.
• This was due to delayed public expenditures and one-off nontax revenues (e.g., a licensing fee for the Jerui gold mine).
• Public debt fell to 53.5% of GDP in June 2015, but is expected to increase in the second half of the year due to higher spending and exchange rate pressures.

Poverty and Income Trends

• Poverty reduction in 2014 was driven by rising agricultural incomes and steady remittances.
• The absolute poverty rate fell by over 6 percentage points to 30.6%.
• However, declining remittances in 2015 (down 20% y/y) are expected to lead to negative income growth for the first time in years, despite positive GDP growth.
• Rural poverty fell more sharply than urban poverty, narrowing the rural-urban gap.

External Vulnerabilities

• The Kyrgyz Republic is highly exposed to external developments, especially in gold exports and remittances.
• Remittances, which account for over 27% of GDP, are a major source of income for households, particularly in rural areas.
• CIS countries, especially Russia and Kazakhstan, are key trade partners, contributing to 84% of non-gold exports on average over the past three years.

Outlook and Risks

• Short-term outlook remains cautious due to external uncertainties and exchange rate pressures.
• Medium-term growth is projected to accelerate to 4.2% in 2016, supported by higher gold production and regional economic recovery.
• However, slower recovery in Russia and Kazakhstan could threaten this projection.
• Fiscal consolidation is expected to be challenging due to rising public spending and increased recurrent expenditures.

Special Focus: Meeting the Jobs Challenge

• Job creation is a central policy challenge for the Kyrgyz Republic.
• Rural youth with modest education face the highest job deficit.
• Migration and remittances are critical for employment, but economic conditions in Russia and Kazakhstan are deteriorating, making it harder for Kyrgyz workers to find employment abroad.
• The Special Focus section discusses the need for policies that promote a more vibrant labor market, including investment in skills development, support for local industries, and improving the business environment.

Key Figures and Tables

Table 1: State Government Budget, January-August 2015

• Total Revenues and Grants decreased from 32.6% to 31.6% of GDP.
• Total Expenditures fell from 36.2% to 30.6% of GDP.
• Public debt-to-GDP ratio declined to 53.5% by end-June 2015.
• External public debt fell to 50.5% of GDP.
• Net lending turned negative, indicating a fiscal tightening.

Figure 1: Real GDP Growth, 2009–August 2015

• GDP growth was frontloaded in 2015, with a sharp decline expected in the second half.

Figure 2: Contribution to Growth by Sector, 2009–August 2015

• Gold sector was the main contributor to growth.
• Agricultural sector also played a significant role.
• Manufacturing and construction growth slowed significantly.

Figure 3: Declining Remittances Driving Negative Income Growth in 2015

• Remittances fell by 25% y/y in the first half of 2015, leading to negative income growth.
• This is expected to offset the positive GDP growth, with a projected income loss of over US$400 million.

Figure 4: Inflation Slowing Down in the First Half of 2015

• Inflation declined from 10.5% y/y in December 2014 to 5.8% y/y in August 2015.

Figure 5: Nominal USD/Som Exchange Rate

• The KGS depreciated by 19% against the USD between January and mid-September 2015.

Figure 6: Nominal Ruble/Som Exchange Rate

• The RUB also depreciated against the KGS, adding to exchange rate pressures.

Figure 7: Exports and Imports, 2010–H1 2015

• Gold exports increased by 42% y/y.
• Non-gold exports declined by 17.7% y/y.
• Imports dropped by 18% y/y, due to lower consumption and investment.

Figure 8: Trade and Current Account Balances, 2010–Q1 2015

• The trade deficit narrowed to 34.9% of GDP in H1 2015 from 48% of GDP in H1 2014.
• The current account balance remained unchanged due to a decline in transfers.

Figure 9: Sluggish Growth in the Second Half of the Year

• The second half of 2015 is expected to have modest growth, due to slower gold production and declining investment.

Figure 10: Differences in Formality, by Residential Status

• Formality rates differ between urban and rural areas, indicating uneven labor market conditions.

Figure 11: Total Domestic Employment, by Sector

• Agriculture and services are the largest employers.
• Industrial employment has been declining over the years.

Figure 12: Population Dynamics

• Population growth is expected to continue over the next few decades.
• Urbanization is likely to increase, affecting labor market dynamics.

Figure 13: Composition of Industrial Sector Employment

• Industrial employment has been declining, particularly in construction and manufacturing.

Conclusion

The Kyrgyz Republic's economy has shown resilience in 2015, but external shocks and exchange rate volatility pose significant risks. While fiscal indicators have remained positive, the debt sustainability outlook is concerning. The labor market remains vulnerable, with remittances and agricultural output playing a crucial role in poverty reduction. The Special Focus on job creation highlights the need for structural reforms and policy interventions to support sustainable employment and economic growth.