Kyrgyz Republic: Selected Issues

IMF Staff Country Reports, July 3, 2019

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Kyrgyz Republic: Selected Issues

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Bibliographic details

• Published: July 3, 2019
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9781498324250.002

Executive summary

• This Selected Issues paper identifies constraints to economic growth in the Kyrgyz Republic using the Hausmann-Velasco-Rodrik diagnostic approach.
• It finds that large infrastructure gaps, weak governance and rule of law, and high cost of finance appear to be the most binding constraints to private investment and growth.
• Additional critical factors include the quality of education and onerous regulations.
• Public debt is on the high side and the composition of spending is tilted toward current spending.

Binding constraints to growth and private investment

• Infrastructure:
  • Large infrastructure gaps persist despite important investments.
  • The country ranks relatively low on infrastructure quality.
• Governance and rule of law:
  • Weak governance undermines growth through investment, human capital, and productivity channels.
  • Weak institutions increase the cost of doing business and make the appropriation of investment returns less certain, reducing investors’ risk appetite.
• Finance:
  • High cost of finance is a major constraint to private investment.
• Regulations:
  • Onerous regulations act as an additional critical factor limiting growth.

Human capital and labor market

• Education:
  • There is room to improve both the quality and cost/efficiency of education spending.
• Labor market:
  • Although relatively low, labor costs have exceeded productivity growth.
  • There is room to improve labor market efficiency.

Fiscal posture and public debt

• Public debt:
  • Public debt is described as "on the high side".
• Fiscal composition:
  • The composition of spending is tilted toward current spending.

Subject coverage and keywords (as listed)

• Subject: Commodities, Consumption, Economic sectors, Electricity, Energy sector, National accounts, Private investment, Tariffs, Taxes
• Keywords: below-cost tariff, CCA oil exporter, CCA oil importer, Consumption, consumption threshold, cost, CR, efficiency of education spending, Electricity, Energy sector, firm, GDP, Global, government, ISCR, Kyrgyzstan, Private investment, ratios in the Kyrgyz Republic, redundancy cost, reform determination, state guarantee, tariff policy, Tariffs

Content in this bundle

• Kyrgyz Republic: Selected Issues; IMF Country Report No. 19/209; May 23, 2019
  • Kyrgyz Republic: Selected Issues; IMF Country Report No. 19/209; May 23, 2019 (Markdown version)
  • Kyrgyz Republic: Selected Issues; IMF Country Report No. 19/209; May 23, 2019 (PDF)