AKIPRESS.COM - The Kyrgyz Republic's GDP is expected to grow by 3.5% in 2021 and 5.0% in 2022, according to the ADB's Asian Development Outlook 2021 Update. Inflation rates are forecasted at 10.0% in 2021 and 7.0% in 2022.
The Kyrgyz Republic’s economy is expected to recover in the second half of 2021 as mining, trade, and other services bounce back from a contraction last year, but the adverse effects of the coronavirus disease (COVID-19) pandemic will likely continue, the Asian Development Bank (ADB) said in a report.
The Asian Development Outlook (ADO) 2021 Update, ADB’s annual flagship economic publication, forecasts the Kyrgyz Republic’s economy to grow by 3.5% in 2021 and 5.0% in 2022, maintaining its original forecasts made earlier this year. However, ADO warned that any recurring waves of the pandemic or a slow vaccine rollout could derail the country’s growth noting that borders had not completely reopened, flights and road traffic had not fully resumed, and business confidence remained low.
“Given the favorable outlook of the Kyrgyz Republic’s trading partners, we at ADB are cautiously optimistic about economic growth while the service sectors recover even though the country continues to feel the impact of COVID-19,” said ADB Country Director for the Kyrgyz Republic Kanokpan Lao-Araya. “We remain fully committed to supporting the Kyrgyz Republic in its efforts to control the pandemic and restore sustainable economic growth.”
Food price inflation remains high as supply chains were slow to recover and pass-through continued from a 20% depreciation of the currency against the US dollar in 2020. With persistent and rapid food price increases, ADB forecasts inflation to accelerate to 10% in 2021 before slowing to 7% in 2022.
In the first quarter of 2021, the current account deficit equaled 4.6% of gross domestic product. Exports contracted by 9.5%, mainly from lower exports of gold and other metals. Higher imports of machinery and equipment, apparel, and sugar boosted total imports by 40.2%, enabled by remittances that were 41.0% above the same period in 2020.
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 to help mitigate the health, social, and economic impacts of the pandemic, and $20 million in emergency assistance to help the government strengthen the health sector.
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.