BISHKEK, Kyrgyzstan, October 6. The growth of Kyrgyzstan's economy is set to slow down in 2023 to 3.5 percent due to a reduction in gold production and a slowdown in the agriculture sector, according to the World Bank's projections, Trend reports.
On the demand side, consumption and investment are expected to provide support for growth, while net exports are anticipated to have a negative impact. Without structural reforms, the GDP is expected to reach a potential growth rate of 4 percent in 2024 and 2025.
The GDP growth rate has moderated from 6.3 percent in 2022 to 3.9 percent in the first half of 2023. This decline is attributed to a significant slowdown in agricultural growth and reduced gold production.
According to WB analysts, the Kyrgyz economy has experienced volatility over the past decade due to its heavy reliance on gold production and remittances.
Over the past decade, gold production contributed to about 10 percent of the country's GDP, while remittances made up roughly 25 percent of the GDP. Additionally, development assistance accounted for approximately 5 percent of the GDP.
The persistently high prices of imported food and fuel, along with adjustments to utility tariffs, have led to high domestic inflation for the past four years, negatively impacting impoverished households.
World Bank analysts also note that economic growth is constrained by the absence of a competitive private sector. To foster private sector development, it will be necessary to promote competition and facilitate investment, particularly by reducing bureaucratic burdens, strengthening the rule of law and investor rights protection, improving digitalization, attracting foreign direct investment (FDI), and facilitating cross-border trade.
According to WB, GDP rate in Kyrgyzstan was 5.5 percent in 2021, and 6.3 percent in 2022.
