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Kyrgyzstan Economical Facts

 

Economical overview

The poor mountain country of Kyrgyzstan has a small cultivable area and an underdeveloped industry. Kyrgyzstan is dependent on aid from Russia, China and the western world and hopes for growing foreign investment in the large unused mineral resources. Gold mining is of great economic importance to the country. For many residents, livestock management is an important source of livelihood.

Another important income for Kyrgyzstan is the money that around 750,000 Kyrgyz guest workers abroad (85 percent work in Russia, the rest mainly in Kazakhstan) send to their home country. These revenues correspond to between a quarter and a third of the country's GDP, which is one of the highest rates in the world.

  • Countryaah.com: Major imports by Kyrgyzstan, covering a full list of top products imported by the country and trade value for each product category.

The informal sector of the economy is estimated to correspond to around 40 percent of GDP. Border trade and smuggling are extensive. Kyrgyzstan has problems with a large foreign debt. It doubled between 2010 and 2017, when about 40 percent of foreign debt was to China. Another challenge is a weak tax collection. Inflation has been relatively low since the mid-2010s.

Inheritance from the Soviet era

Economical Facts of Kyrgyzstan

The Kyrgyz economy is characterized by the legacy of the Soviet era (1918–1991), when the republic was forced to specialize in a few industries and supply goods to other Soviet republics. The Kyrgyz contributed mainly to sheep management, supply of wool, cotton cultivation and electricity production, while they became dependent on heavily subsidized goods, centrally financed investments and interest-free or amortized credits.

  • Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including KYR which represents the country of Kyrgyzstan.

The result was acute supply problems when the Soviet Union disbanded in 1991. Industrial production collapsed, inflation rose rapidly and GDP halved in four years. The government responded with reforms for economic liberalization and privatization, and soon Kyrgyzstan was seen as a leading reform country in Central Asia. A national currency was introduced (Kyrgyzstan), inflation was suppressed and a commercial banking system was built up.

However, the market reforms led to many disappointments. Despite privatizations, the same old directors led the same loss-making companies with contributions from the same bureaucratic ministries. Corruption and bureaucracy characterized the system, which deterred foreign investors. Telecommunications, gas, electricity and airlines remained state-owned, while many commercial and service companies were sold out.

Big swings

Kyrgyzstan was hit hard by the Russian financial crisis in 1998, but the discovery of a new gold mine, Kumtor, caused GDP to grow again, though from a low level. When gold mining revenues turned downward in 2005, the economy stagnated again. The decline was followed by three years of good growth before the global financial crisis hit the country in 2009.

The riots and the political turmoil in 2010 (see Modern history) meant continued economic decline. The World Bank provided Kyrgyzstan with more than a billion dollars for reconstruction and to reduce the budget deficit. Still, the economy shrank somewhat in 2012 when political contradictions surrounding the ownership of the Kumtor mine led to reduced revenue from mining.

In 2013, GDP growth exceeded 10 percent, thanks to gold mining getting back on track and agriculture giving higher returns. During the remainder of the 2010s, growth was considerably more modest but somewhat more stable than before. However, a new crisis in the Russian economy from 2014 meant that money shipments from Kyrgyzstan in Russia declined the following year, and the World Bank introduced new support measures. The situation stabilized in 2016 and 2017 to turn downward again in the following two years due to lower gold exports than expected.

Like other developing countries, Kyrgyzstan mainly exports raw materials, while imports mainly consist of industrial goods. Gold has been the most important export commodity since the turn of the millennium. Other important export goods are gemstones, minerals, textiles, cotton, wool, meat, glass, tobacco and electricity. Imports consist of oil, natural gas, metals, machinery, vehicles and more. There are large deficits in foreign trade, which means that the country imports more than it exports.

FACTS - FINANCE

GDP per person

US $ 1,281 (2018)

Total GDP

US $ 8,093 million (2018)

GDP growth

3.5 percent (2018)

Agriculture's share of GDP

11.6 percent (2018)

Manufacturing industry's share of GDP

15.2 percent (2018)

The service sector's share of GDP

49.8 percent (2018)

Inflation

1.3 percent (2019)

Government debt's share of GDP

56.0 percent (2018)

External debt

US $ 8,161 million (2017)

Currency

Kyrgyz as

Merchandise exports

US $ 1,804 million (2018)

Imports

US $ 4,543 million (2018)

Current account

- US $ 700 million (2018)

Commodity trade's share of GDP

82 percent (2018)

Main export goods

gold, gemstones, minerals, textiles (2018)

Largest trading partner

China, Russia, Kazakhstan (2018)

2008

February

"Uzbek security service behind journalist murder"

The think tank International Crisis Group (ICG) reports that Uzbekistan's security service is probably guilty of the murder of journalist Alisjer Saipov in southern Kyrgyzstan (see October 2007).

 

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