A new report published by the Asian Development Bank (ADB) suggests that Kyrgyzstan's GDP will increase 6.5% this year and an additional 5.5% in 2015. This positive prediction is based on the country’s gold production, which remains stable, and foreign investments (mainly from Russia and China) in energy and transport.
"Higher domestic demand, encouraged by greater political stability and an improved investment climate, should spur growth in the private sector unconnected to gold. Growth is expected to stabilise at about 5% in the medium term, supported by infrastructure investments and continued increases in credit," the ADB said in its report.
"Transportation and communications should perform well as major road networks and energy infrastructure is rehabilitated and communication networks are expanded,” the bank added. “Industry is expected to grow by about 10% annually, with metals and metallurgy being the main drivers and gold remaining the principal output."
Meanwhile, revenue is expected to account for a third of Kyrgyzstan’s GDP this year and next year thanks to taxation reforms that top the government’s agenda.
"Expenditure is projected at 35% of GDP in 2014 and 34% in 2015, reflecting higher capital spending and somewhat lower current outlays," the report said. However, falling gold prices and expected weaker demand, mainly for textiles, food, and machinery in Russia and other markets in the Commonwealth of Independent States (CIS), may worsen the trade outlook, according to the ADB. On the other hand, imports are expected to grow by about 10% in both 2014 and 2015 thanks to new infrastructure projects.