Kyrgyz Republic Country Economic Memorandum
The Kyrgyz Republic has experienced modest and volatile economic expansion since the economy bottomed out from the transition recession in 1995, when GDP amounted to about half of its pre-independence levels. As a result of structural reforms at the start of transition, the emergence of remittances and commodity exports, largely gold, as powerful new drivers of growth, and improvements in the macroeconomic management in the recent decade, per-capita real GDP grew by 3.1 percent a year on average since 1995. The Kyrgyz Republic is now a lower middle-income economy, as it was in 1990. Economic expansion has benefitted from fixed investment that has risen to 31 percent of GDP, one of the highest in Europe and Central Asia and well-above the threshold of 25 percent reached by the group of successful countries studied by the Growth Commission in 2007. Lower fiscal deficits and low inflation indicate the success of recent macroeconomic policies. These achievements notwithstanding, Kyrgyz Republic’s growth and productivity performance has lagged most relevant comparators, frustrating the needs of the poor and the young. As a result, while per-capita GDP in constant prices has doubled since 1995, it has still not caught up with pre-independence levels. Per-capita incomes in the Kyrgyz Republic have increased by 20 percent less than the average of lower middle-income countries since 2000 and 40 percent less than the average for the Caucasus and Central Asia. Productivity increases – proxied by changes in total factor productivity, have averaged half a percent since 2000, leaving largely factor accumulation as the driver of economic growth. And while ‘Productivity isn’t everything, but in the long run it is almost everything’, highlighting one of the main challenges of the country’s current growth model.3 Poverty has declined, but modest growth has made a modest dent, leaving the poverty rate as high as 31 percent, with a substantial part of the population living in regions with more limited and lower quality government services than in Bishkek.
| Main Authors: | , , , , , , |
|---|---|
| Format: | Report biblioteca |
| Language: | English |
| Published: |
World Bank, Washington, DC
2020-03-26
|
| Subjects: | ECONOMIC GROWTH, MACROECONOMIC POLICY, PRIVATE SECTOR DEVELOPMENT, TRADE POLICY, ENERGY POLICY, POVERTY ALLEVIATION, YOUTH EMPLOYMENT, GOVERNANCE, INCLUSIVE GROWTH, PUBLIC SECTOR REFORM, FOREIGN AID, DEBT FORGIVENESS, VOLATILITY, INSTITUTIONS, |
| Online Access: | http://documents.worldbank.org/curated/en/679681585289928309/Kyrgyz-Republic-Country-Economic-Memorandum http://hdl.handle.net/10986/33494 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| Summary: | The Kyrgyz Republic has experienced
modest and volatile economic expansion since the economy
bottomed out from the transition recession in 1995, when GDP
amounted to about half of its pre-independence levels. As a
result of structural reforms at the start of transition, the
emergence of remittances and commodity exports, largely
gold, as powerful new drivers of growth, and improvements in
the macroeconomic management in the recent decade,
per-capita real GDP grew by 3.1 percent a year on average
since 1995. The Kyrgyz Republic is now a lower middle-income
economy, as it was in 1990. Economic expansion has
benefitted from fixed investment that has risen to 31
percent of GDP, one of the highest in Europe and Central
Asia and well-above the threshold of 25 percent reached by
the group of successful countries studied by the Growth
Commission in 2007. Lower fiscal deficits and low inflation
indicate the success of recent macroeconomic policies. These
achievements notwithstanding, Kyrgyz Republic’s growth and
productivity performance has lagged most relevant
comparators, frustrating the needs of the poor and the
young. As a result, while per-capita GDP in constant prices
has doubled since 1995, it has still not caught up with
pre-independence levels. Per-capita incomes in the Kyrgyz
Republic have increased by 20 percent less than the average
of lower middle-income countries since 2000 and 40 percent
less than the average for the Caucasus and Central Asia.
Productivity increases – proxied by changes in total factor
productivity, have averaged half a percent since 2000,
leaving largely factor accumulation as the driver of
economic growth. And while ‘Productivity isn’t everything,
but in the long run it is almost everything’, highlighting
one of the main challenges of the country’s current growth
model.3 Poverty has declined, but modest growth has made a
modest dent, leaving the poverty rate as high as 31 percent,
with a substantial part of the population living in regions
with more limited and lower quality government services than
in Bishkek. |
|---|