The International Monetary Fund cut its forecast for growth of the Kyrgyz economy in 2016 to 2.2 percent. Statement on the results of IMF mission to Kyrgyzstan says.
It is noted that, after a difficult start of the year, the pressures on the economy of Kyrgyzstan are beginning to moderate, helped by a stabilizing regional context. In the first half of 2016, overall and non-gold growth reached -2.3 percent and 1.2 percent, year-on-year, respectively. Inflation is subdued at 1.3 percent year-on-year, at the end of June, whereas the som has appreciated by 11.3 percent by early July.
"For 2016 as a whole, growth is expected to reach 2.2 percent, while inflation will remain below 3.5 percent. The government should make every effort to keep the fiscal deficit in 2016 within the budgeted 4.5 percent of GDP. Meeting this target will require significant efforts aimed at increasing revenues and controlling expenditures. In this context, the recent introduction of a new VAT exemption on imported grain is counterproductive and should be reversed," IMF experts say.
IMF mission led by Edward Gemayel visited Bishkek during July 8-14 to take stock of the latest economic developments and prepare the ground for the third review mission under the Extended Credit Facility (ECF), tentatively scheduled for the second half of September.