In the Kyrgyz republic we focus on:
Fostering sustainable growth by strengthening regional cross-border linkages: As a landlocked economy with a limited domestic market, the Kyrgyz Republic would benefit greatly from deeper regional integration, given its important energy export potential, as well as good regional trade and transit position. In that context, the Bank will aim to help facilitate economic and trade cooperation and integration with the region, by supporting rehabilitation of critical infrastructure, strengthening the exporting sector including through access to finance and advisory, as well as supporting cross-border investments and regional cooperation projects.
Enabling SMEs to scale-up and bolster competitiveness: Outside the extractive sector, the economy is dominated by SMEs, with few mid-sized corporates in existence. While deeper regional trade links create opportunities for the best local firms, stronger operating models and core competencies will be needed to better compete. The Bank will thus support competitiveness and sustainable growth of SMEs with viable business models through investment and advisory, promoting in particular skills transfer and operational efficiency improvements, and seek to strengthen the financial sector to facilitate access to finance for SMEs, in particular in local currency. The Bank will also step up its efforts of improving the business environment through policy dialogue.
Promoting sustainability of public utilities through commercialisation and private sector participation: To address underinvestment, deficient regulatory environment, weak core competencies, poor financial and operational performance, the Bank will continue to support municipal utilities, where it has a recognized expertise and delivery model in improving operators’ financial condition, operating practices and governance, and seek to support sustainability of power sector by rehabilitating assets and developing a more attractive institutional framework for private investment.
In addition, the Bank will seek to support through the above priorities the reduction of regional economic disparities, by increasing its outreach to less developed rural areas, in particular in the southern regions, and addressing inclusion gaps in relation to gender and youth across sectors.
The EBRD’s latest Kyrgyz Republic strategy was adopted on 25 February 2015
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EBRD forecast for Kyrgyz Republic Real GDP Growth in 2017 4.4%
EBRD forecast for Kyrgyz Republic Real GDP Growth in 2018 4.2%
Growth in the Kyrgyz Republic reached 5.0 per cent year-on-year in the first nine months of 2017, reflecting strong gold production. Excluding the Kumtor gold mine, GDP growth was 3.6 per cent year-on-year, broadly unchanged from 2016. The Kyrgyz som remained broadly stable over 2017, with foreign exchange reserves close to US$ 2 billion or five months of import cover as of September 2017.
Growth is expected to reach 4.4 per cent in 2017 and 4.2 per cent in 2018, on the back of strong growth in mining and higher gold exports, as well as continued growth in remittances, boosting household demand. in the first eight months of 2017, remittances from Russia increased by 26.8 per cent in US dollar terms. Infrastructure spending from China will likely remain significant. However, the fiscal loosening in the up-run to the presidential election will have to be reversed in order to continue with the IMF programme. This will weigh on GDP growth and keep it below 5 per cent in the medium term.