This regular economic report records theeconomic activities of Kyrgyz Republic for the year 2013.The growth performance of the Kyrgyz Republic has beenencouraging and largely in line with our forecasts from theSpring 2013 update. Real Gross domestic product (GDP)expanded by 8 percent in the first eight months of 2013(year-on-year) driven by a recovery in gold production atthe Kumtor mine. The non-gold economy also performed well,as strong private transfers from abroad and higher credit tothe private sector fueled private consumption andinvestment. At the same time, the contribution of the publicsector was more limited with government spending kept undercontrol. Following a slow start, officially recorded exportshave started to recover. Macroeconomic policies have beensupportive of stability and stronger economic activity. Thebaseline scenario for 2014 remains optimistic, thoughheadwinds have been gaining strength. The challenge tosustain high economic growth rates in the medium term isconsiderable. Monetary policy needs to be cautious toprevent the build-up of risks in the financial sector andlimit inflationary pressures. Second, creation of a vibrantand competitive private sector will require significantupgrading of the country’s institutional, physical and humancapital. A business environment characterized by efficientinstitutions, reliable infrastructure and highly-skilledlabor will help realize the country’s growth potential andreduce poverty.
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