Kyrgyzstan Economic Forecast

Economic growth slowed in January–March, expanding 4.6% year on year, down from 7.0% in January–December 2022. The moderation came on the back of lackluster expansions in the agricultural, industrial and construction sectors, as well as softer growth in cargo transportation volumes. In addition, annual net remittances declined by 34%, which likely pressured household spending. That said, retail trade and capital investment growth accelerated, while the Kumtor mine saw a surge in gold production. Turning to Q2, GDP growth should continue to slow. Growth in the economic-activity index softened to 4.4% yoy in January–April, chiefly due to waning industrial output growth. That said, the rest of the domestic economy was dynamic: Agricultural output, retail sales, construction activity and fixed investment all expanded more rapidly. On the external side, exports also grew at a faster pace.

Inflation declined to 10.7% in April (March: 12.7%), moving closer to the Central Bank’s 5.0–7.0% target range. Meanwhile, the Central Bank kept its policy rate at 13.00% on 30 May. Our panelists anticipate inflation easing this year due to lower global price pressures, slower activity and high interest rates. Higher domestic tariffs and commodity price swings pose risks.