AKIPRESS.COM - The Kyrgyz Republic’s economy is expected to grow 3.0% in 2022 and 3.5% in 2023 on the back of sustained growth in the first 7 months of this year and a government anti-crisis plan estimated to equal 2.5% of gross domestic product (GDP), the Asian Development Bank (ADB) said in a report.
According to an update of the Asian Development Outlook (ADO) 2022, ADB’s annual flagship economic publication, the economy grew by 7.7% during the first 7 months of 2022 with increases nearly across the board. Industry expanded by 17.8% on gains of 45.6% in metal processing, 27.5% in wood and wood products, and 12.9% in food and tobacco.
“While geopolitical uncertainty persists and although a major slowdown is expected in the second half of this year, our economic update nevertheless raises our growth expectations in 2022 and 2023 and sustains our forecasts for a steady current account deficit in both years,” said ADB Country Director for Kyrgyz Republic Kanokpan Lao-Araya.
Annual inflation in the first 7 months of 2022 reached 13.0% mainly due to higher global prices for food and energy, and currency depreciation against the US dollar in March and April. Inflation is expected to remain high this year before moderating slightly in 2023.
Services grew by 3.5% during the first 7 months of 2022 with an increase of 12.5% in food and accommodation after the country received 3.8 million international visitors—almost double the number compared to the same period last year. Agriculture grew by 8.4% on gains in crop production, particularly wheat and barley. Construction expanded by 3.6% reflecting more investment in housing and facilities for mining and manufacturing, supplying electricity, transportation, cargo storage, hotels and restaurants, education, and health care.
According to the update, the Russian invasion of Ukraine and resulting sanctions on the Russian Federation will constrain the outlook for growth given the Kyrgyz Republic’s close economic ties through remittances, trade, investment, and tourism.
Last year, ADB approved a $50.65 million package to help procure public electric buses and enhance public transport infrastructure in Bishkek, an $80 million policy-based lending program to support economic diversification, $25 million to help procure coronavirus vaccines, and $35 million to help reduce landslide risk in the Kyrgyz Republic.