New Delhi: The Kyrgyz Republic’s economy is expected to recover slowly in 2021 before accelerating in 2022 as borders reopen and supply chains reactivate, according to a new Asian Development Bank (ADB) report.
In its Asian Development Outlook (ADO) 2021, ADB forecasts the Kyrgyz Republic’s gross domestic product (GDP) growth to be 3.5% in 2021 and 5.0% in 2022. ADO is ADB’s flagship annual economic publication.
“While we are cautiously optimistic on growth, much will depend on a broad recovery in the Central Asian region,” said ADB Country Director for the Kyrgyz Republic Kanokpan Lao-Araya. “Import-dependent industries such as manufacturing, construction, and mining will benefit from a regional economic recovery and enhance the Kyrgyz Republic’s growth.”
Inflation is expected to accelerate to 7% in 2021 and 2022, with food inflation remaining high due to the continued effect of currency depreciation and the slow recovery of supply chains. The central bank is expected to maintain its focus on price stability and intervene in currency markets only to smooth volatility.
Healthy gold exports are expected to push total export growth to 5% in 2021 and 2022. Meanwhile, imports could increase by about 10% this year and next, as delayed infrastructure projects resume. Remittances will likely recover further by about 5% in both years, assuming a recovery in the region, especially the Russian Federation.
To improve social protection and help stabilize the economy as the coronavirus disease (COVID-19) subsides, the report recommends integrating workers who became unemployed during the pandemic and returning migrants back into the economy. The report calls for the social protection database to be improved with the main demographic indicators, rapidly validating registrations for assistance and providing support.
Last year, ADB approved $70 million in COVID-19 response support for the Kyrgyz Republic. This included a $50 million loan and grant financing package approved in May and $20 million in emergency assistance to help the Government strengthen the health sector approved in June.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.