Kyrgyzstan's economic week, May 29- June 3

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This week it became known that 97% of remittances of labor migrants from Kyrgyzstan comes from Russia. According to data of the National Bank of the Kyrgyz Republic, for the first quarter of 2017, the gross inflow of remittances amounted to $ 444.5 million, an increase made 47%. Kyrgyz migrants transferred $ 433 million from Russia, which is 49% more than a year ago. Such an amount has not been transferred by Kyrgyz from Russia since 2010.

There is a tendency of reviving domestic consumption along with the growth of remittances to the country. In addition, there is a noticeable increase in external demand for Kyrgyz goods, which has a positive impact on current inflation. The economic growth for 4 months of 2017 amounted to almost 8%, and without Kumtor's indicators, real GDP growth made 4%.

This week it became known that the National Bank sold gold bars for 463 million soms. The leadership of the bank assures that the situation is stable, since an instrument has been created that allows the population to earn money in the gold market. The population of Kyrgyzstan is confidently involved in the gold market and can save money on this, and perhaps even earn money. This gives the signal to commercial banks to use such a tool.

For the first quarter of 2017, exports in the agricultural sector of Kyrgyzstan increased by 129%. According to data of the Ministry of Agriculture of the Kyrgyz Republic, exports of agricultural products increased due to the growth in the supply of goods of livestock and processing industry. This year, Kyrgyzstan has the opportunity to increase export of its products through the supply of fresh fruit to China.

The serious and ambitious Taza Koom project was widely presented this week in Bishkek, the implementation of which will pierce all sectors of society and all state bodies of Kyrgyzstan. Expected investors, on whom the initiators of the project stake, both internal and external, can support it, but their inflow depends on what conditions and guarantees they will be provided by the state.

The project was discussed in detail within three days with the participation of representatives of state bodies, the non-governmental sector, and international organizations. A number of international organizations, including the World Bank, supported the project. The WB intends to assist the Taza Koom project through its own Digital CASA project, which aims to transfer the countries of the region to the digital level of development. According to the conference participants, the private sector can also act as an investor or partner on the principles of public-private partnership. The Ministry of Economy of the Kyrgyz Republic already has draft-projects, one of which is a project to introduce e-ticketing in the country.

An important topic at the conference was the need to build a knowledge-based economy in Kyrgyzstan, with the leading role of human capital in the country's innovative development.

In the investment reviews conducted by the International Business Council, the index "Availability of qualified personnel" has recently included in the top-10 priorities for investors. These problems influence decisions made by investors along with such indicators as the availability of finances, security, corruptness of officials.

Taza Koom project will provide an opportunity to attract investments in the field of Information and Communication Technologies (ICT).

For this purpose, there are liberal laws, corresponding nature in Kyrgyzstan. A number of conference participants said that Kyrgyzstan could combine ICT and tourism. Representative of the South Korean Government, Jung Biyong Hu, who attended the conference, said that this will improve the economic situation in the country. "Kyrgyzstan is the same as the Swiss Alps. There are many places for the development of such types of tourism as skiing, mountaineering, walking, etc. It can become a symbol of this project. As far as I heard, tourism makes 5% of GDP in Kyrgyzstan. If you combine ICT and tourism, the GDP from it can be raised to 15-20%," he said.

This week it became known that 26 enterprises of Kyrgyzstan, included in the single register of the Eurasian Economic union, will supply their products to the whole Kazakhstan. Such an agreement was reached between the relevant services of Kyrgyzstan and Kazakhstan. Previously, Kyrgyz enterprises supplied their products only to the southern areas of the neighboring country.

The World Bank announced this week that in 2017, the growth of the economy of Kyrgyzstan could reach 3.5%, and no sharp changes are expected in the macroeconomic sector. According to official representatives of the World Bank, the forecast for the countries of the region and Russia is positive, as the economies of the countries are recovering. The forecast "is based on new energy prices and on the global changes that are taking place in the world," says in the WB statement. At the same time, the WB said that the main growth of the economy in Central Asian countries is expected due to the growth in gold production. But in 2018, according to the World Bank's forecast, Kyrgyzstan's GDP growth will be 4%.

The World Bank predicted a decrease in poverty in Kyrgyzstan in 2017-2018.

According to data of the World Bank, the forecasts of stable growth in agriculture and construction along with further money transfer growth can contribute to poverty reduction.

"According to forecasts, real wages in the private sector will grow slowly, which leads to a small reduction in poverty both among the urban and among the rural population. Planned increase of pensions will have a positive distributional effect, since pensions account for 15% of incomes of low-income people," the report said.

"According to forecasts, in 2017 the national poverty level will drop by 31.7%, and in 2018 - by 30.2%," the report said.

Kabar News Agency

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