ADB Forecasts Inflation at 17% in Kyrgyzstan in the Second Half Of 2011
Friday 16 September 2011
Bishkek (24.kg news agency) – The Asian Development Bank (ADB) forecasts inflation at 17% in Kyrgyzstan in the second half of 2011.
As noted, the economy of the Kyrgyz Republic showed stable rates of recovery in the first part of 2011. In the first six months GDP amounted to 5.5% despite the low baseline in 2010. Recovery is caused by double-digit growth in the mining industry (mainly gold mining), manufacturing and utilities sector. A slight increase is observed in the agricultural sector, while construction and fixed capital formation showed a moderate decrease.
According to ADB predictions, more rapid economic growth – at 5.5% – is expected in the second half of the year, but only subject to political and social stability. The increase of social overhead costs, wage increases of public sector employees and reconstruction works in the southern region will inevitably widen the budget deficit to 7.6% in 2011, noted in ADB.
ADB stressed that the deficit of the current account transactions will remain the same: at 9% percent. The foreign debt of KRG will be at the level 57% of GDP similar to figures in 2010 due to US $50 million debt relief by Turkey and expected $194 million debt relief by Russia, ADB summarizes.