During the first 6 months of 2013, gross domestic product (GDP) in the Kyrgyz Republic grew by 7.9%, as a rebound in output at the Kumtor goldmine boosted industrial output by 18.4%. Agriculture grew by 1.9%, and trade by 8.2%, while construction soared by 15.0%, reflecting a substantial rise in new capital projects and extensive repairs to existing structures. In view of these developments, and because the ongoing dispute at the Kumtor mine is no longer expected to affect output in 2013, the Asian Development Outlook (ADO) 2013 Update raises the growth forecast for 2013 to 7.5% from the 5.5% projected in ADO 2013 in April, leaving the forecast for 2014 at 4.5%.
|Selected Economic Indicators (%) - Kyrgyz Republic||2013||2014|
|ADO 2013||Update||ADO 2013||Update|
|Current Account Balance (share of GDP)||-7.0||-8.0||-5.0||-5.0|
Source: Asian Development Outlook (ADO) 2013 Update; ADB estimates.
Inflation during January-June 2013 reached 7.8%, driven mainly by price increases of 6.7% for food, 7.9% for other goods, and 8.5% for services. However, the anticipation of good grain harvests in Kazakhstan and the Russian Federation has since stabilized food prices. Inflation is expected to moderate slightly during the second half of the year, easing to 7.5% by year-end and thus matching the ADO 2013 forecast. The forecast remains for inflation to fall further to 5.5% in 2014 in line with an expected slowing of economic growth.
The trade deficit widened during January-May 2013, reflecting 13.0% growth in imports and 7.9% decline in exports. Remittance inflows decreased, as did exports of textiles and textile products, reflecting weaker external demand and slower growth in major trading partners. At the same time, petroleum imports increased. Nonetheless, the current account balance is forecast to improve by year-end, with export growth narrowing the deficit to 8.0% of GDP in 2013, slightly above the 7.0% projected in ADO 2013. The current account deficit is still projected at 5.0% of GDP for 2014.
Source: ADB. 2013. Asian Development Outlook 2013 Update. Manila.