Kyrgyz Republic Economic Update, No.9, Fall 2019 : Strong Growth Led by the Gold Sector – With a Special Focus on Public Investment Management
Gold production increased substantially in 2019, providing a strong boost to economic growth. Output from the country's largest gold mine, Kumtor, rose by 33 percent year on year in January-October, a reversal from the 8 percent contraction in...
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| Format: | Report |
| Language: | English |
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World Bank, Washington, DC
2020
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| Online Access: | http://documents.worldbank.org/curated/en/768611577197908990/Kyrgyz-Republic-Economic-Update-Strong-Growth-Led-by-the-Gold-Sector-With-a-Special-Focus-on-Public-Investment-Management http://hdl.handle.net/10986/33122 |
| Summary: | Gold production increased substantially
in 2019, providing a strong boost to economic growth. Output
from the country's largest gold mine, Kumtor, rose by
33 percent year on year in January-October, a reversal from
the 8 percent contraction in the same period of 2018. As a
result, real GDP grew by 5.7 percent in January-October, up
from 3.5 percent in 2018 as a whole. Gold exports, which
increased by almost 55 percent year on year, contributed to
strong export earnings and a narrower current account
deficit. Monetary policy easing and continued remittance
inflows also supported GDP growth. Real GDP is projected to
grow by 4.2 percent in full-year 2019, as gold production
growth is slowing in the last three months of the year.
Economic activity is likely to keep the same pace in the
medium term as gold production volume will stay at the
current level. The current account deficit is expected to
remain wide despite rising remittances. The fiscal deficit
widened slightly in January-September 2019 owing to lower
tax revenues as a percentage of GDP (mainly due to reduced
receipts from import taxes). As investment spending
accelerates in the second half of the year—and a 30-percent
wage increase for teachers took effect in October— the
budget deficit is likely to widen to 3.2 percent of GDP in
2019 from 1.6 percent of GDP in 2018. The government plans
to reduce the fiscal deficit to 3 percent of GDP in 2020 in
line with the fiscal rule; the latter is currently pending
parliamentary approval. Improving expenditure management has
been a key challenge in the Kyrgyz Republic, especially in
the context of the need to create the much-needed fiscal
space for investment in infrastructure and human capital.
The special focus section explores the main issues related
to public investment management and discusses how to enhance
the selection, assessment, and evaluation processes of
public investment projects. |
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