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Undiversified economy, country's dependence upon global gold prices, energy carriers among risks that may affect Kyrgyzstan's GDP growth

June 12, 2014

The Finance Ministry has named external and internal risks that may affect GDP growth during 2015-2017 in Kyrgyzstan in the medium-term budget forecast.

These risks include:

- Undiversified economy: high dependence of production from outcomes of Kumtor mine operation;

- Dependence of the country's economy on global gold prices, energy carriers and other raw materials;

- reliance of internal market on import of food products (flour, cooking oil, sugar, cereals, etc.) and fuel;

- ongoing unsteadiness of global economy;

- weather and climate conditions that may affect development of agriculture and energy sector;

- reduction of work places for migrant workers in Russia and Kazakhstan as a result of toughened migration legislation;

- hiking world prices for food and oil;

- predominance of import in foreign trade;

- conflicts between local communities and mining companies.

Strengthening of macroeconomic stability and achievement of sustainable economic growth will be main goal of economic policy for 2015-2017, the Finance Ministry said.

The following will be important prerequisites for successful implementation of macroeconomic policy:

- socio-political stability in the country;

- implementation of consistent monetary and taxation policy;

- moderate growth of internal consumer prices;

- strengthening of banking system and deepening of financial markets;

- improvement of business environment through reduction of inteference of state into economy;

- implementation of major investment projects defined by the program of transition of Kyrgyzstan to sustainable development during 2013-2017;

- launch of new mines and full operation of Zhongda oil refinery;

- annual provision of concessional loans to agricultural producers that will lead to development of agrarian sector and processing industry;

- moderate growth of prices for oil products;

- expansion of trade with Shanghai Cooperation Organization, Eurasian Economic Community, CIS countries, taking advantage of Kyrgyzstan's WTO membership, broader cooperation with international economic and financial organizations;

- reduction of external debt burden.

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Source: AKIpress News Agency (Kyrgyz Republic)

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