{
  "title": "IMF Executive Board Completes the Third Review Under the Extended Credit Facility Arrangement for the Kyrgyz Republic",
  "publication": "IMF News, December 15, 2016",
  "sourceUrl": "https://www.imf.org/en/news/articles/2016/12/15/pr16559-kyrgyz-republic-imf-executive-board-completes-the-third-review-under-ecf",
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  "summary": "On December 14, 2016, the Executive Board completed the third review of the Kyrgyz Republic’s economic performance under the three-year Extended Credit Facility (ECF) arrangement.",
  "publishDate": "2016-12-15",
  "sections": [
    {
      "heading": "Board decision and financing",
      "content": "- On December 14, 2016, the Executive Board completed the third review of the Kyrgyz Republic’s economic performance under the three-year Extended Credit Facility (ECF) arrangement.\n- The Board’s approval enables the immediate disbursement of SDR 9.514 million (about US$12.9 million).\n- Total disbursements under the arrangement would rise to SDR 38.056 million (about US$51.5 million).\n- The ECF arrangement was originally approved on April 8, 2015, for SDR 66.6 million (about US$92.4 million)."
    },
    {
      "heading": "Assessment, risks, and policy recommendations",
      "content": "- Near-term outlook and risks:\n  - “While pressures on the economy are moderating, the near–term outlook remains challenging.”\n  - A subdued external environment and weak domestic demand are constraining growth prospects.\n  - Debt and financial sector vulnerabilities remain elevated.\n  - Program risks cited include dwindling commodity prices, protracted regional recovery, and policy slippages in the run-up to the 2017 presidential elections.\n- Program implementation and conditionality:\n  - The Kyrgyz authorities delivered on most program commitments: all June quantitative performance criteria and indicative targets were met; all but two structural benchmarks were met.\n- Fiscal policy recommendations:\n  - “A full commitment to growth-friendly fiscal consolidation envisaged under the program is critical to maintaining public finances on a sustainable path.”\n  - Consolidation should be underpinned by credible and permanent revenue and expenditure measures.\n  - Specific measures recommended: increasing tax revenues, reducing the wage bill, streamlining nonpriority spending, improving the public investment framework.\n  - Introducing a fiscal rule is recommended to support fiscal discipline.\n- Monetary and exchange rate policy:\n  - The National Bank of the Kyrgyz Republic (NBKR) should continue a two-way flexible exchange rate policy and limit interventions to smoothing excessive som volatility.\n  - The planned gradual transition to inflation targeting is welcomed.\n- Financial sector and legal framework:\n  - While the adopted Banking Law includes some improvements, the dropping of key provisions by Parliament and recent amendments weaken the Law.\n  - Further amendments to the Banking Law are needed to increase central bank independence, strengthen the resolution framework, and preserve financial sector stability in the current weak economic environment."
    },
    {
      "heading": "Key macroeconomic findings and projections (selected indicators, 2015–21)",
      "content": "- Nominal GDP (in billions of soms)\n  - 2015: 430.5\n  - 2016 Est.: 452.0\n  - 2017: 486.2\n  - 2018: 518.5\n  - 2019: 569.9\n  - 2020: 622.7\n  - 2021: 674.7\n- Real GDP (growth in percent)\n  - 2015: 3.5\n  - 2016 Est.: 2.6\n  - 2017: 2.3\n  - 2018: 2.9\n  - 2019: 5.9\n  - 2020: 5.3\n  - 2021: 4.3\n- Nongold real GDP (growth in percent)\n  - 2015: 4.5\n  - 2016 Est.: 2.4\n  - 2017: 2.8\n  - 2018: 3.9\n  - 2019: 5.0\n- Consumer prices (12-month percent change, eop)\n  - 2015: 3.4\n  - 2016 Est.: 1.5\n  - 2017: 4.7\n  - 2018: 5.5\n  - 2019: 5.2\n  - 2020: 5.1\n- Consumer prices (12-month percent change, average)\n  - 2015: 6.5\n  - 2016 Est.: 0.8\n- General government finances (in percent of GDP) 1/\n  - Revenue\n    - 2015: 35.6\n    - 2016 Est.: 38.0\n    - 2017: 36.3\n    - 2018: 35.4\n    - 2019: 35.1\n    - 2020: 35.0\n    - 2021: 35.2\n  - Of which: Tax revenue\n    - 2015: 19.1\n    - 2016 Est.: 21.6\n    - 2017: 21.9\n    - 2018: 22.1\n    - 2019: 22.3\n    - 2020: 22.5\n    - 2021: 22.7\n  - Expense\n    - 2015: 30.1\n    - 2016 Est.: 32.5\n    - 2017: 30.5\n    - 2018: 29.7\n    - 2019: 29.3\n    - 2020: 28.9\n  - Gross operating balance\n    - 2015: 5.7\n    - 2016 Est.: 5.8\n    - 2017: 6.1\n    - 2018: 6.3\n  - Net acquisition of nonfinancial assets\n    - 2015: 6.6\n    - 2016 Est.: 10.0\n    - 2017: 8.7\n    - 2018: 7.2\n    - 2019: 7.3\n    - 2020: 7.6\n    - 2021: 7.8\n  - Overall balance (net lending/borrowing)\n    - 2015: -1.2\n    - 2016 Est.: -4.5\n    - 2017: -3.0\n    - 2018: -1.6\n    - 2019: -1.5\n  - Overall balance including onlending\n    - 2015: -3.2\n    - 2016 Est.: -7.9\n    - 2017: -6.2\n    - 2018: -4.0\n  - Total public debt 2/\n    - 2015: 65.0\n    - 2016 Est.: 62.1\n    - 2017: 64.2\n    - 2018: 65.5\n    - 2019: 62.0\n    - 2020: 60.3\n- Banking sector\n  - Reserve money (percent change, eop)\n    - 2015: 4.0\n    - 2016 Est.: 27.7\n    - 2017: 9.7\n    - 2018: 9.3\n    - 2019: 8.6\n    - 2020: 8.1\n  - Broad money (percent change, eop)\n    - 2015: 14.9\n    - 2016 Est.: 16.1\n    - 2017: 12.5\n    - 2018: 10.9\n    - 2019: 10.8\n    - 2020: 8.8\n  - Credit to private sector (percent change, eop)\n    - 2015: 17.2\n    - 2016 Est.: 11.2\n    - 2017: 14.1\n    - 2018: 14.4\n    - 2019: 11.4\n    - 2020: 10.4\n  - Credit to private sector (in percent of GDP)\n    - 2015: 22.4\n    - 2016 Est.: 23.9\n    - 2017: 24.9\n    - 2018: 25.4\n    - 2019: 25.8\n- External sector\n  - Current account balance (in percent of GDP)\n    - 2015: -10.9\n    - 2016 Est.: -10.0\n    - 2017: -13.6\n    - 2018: -13.8\n    - 2019: -11.9\n    - 2020: -11.7\n    - 2021: -11.5\n  - Export growth (percent change)\n    - 2015: -21.5\n    - 2016 Est.: -0.1\n    - 2017: 6.0\n    - 2018: 5.6\n    - 2019: 14.3\n    - 2020: 10.3\n  - Import growth (percent change)\n    - 2015: -27.1\n    - 2016 Est.: 4.2\n  - Gross International reserves (in millions of U.S. dollars)\n    - 2015: 1,468\n    - 2016 Est.: 1,680\n    - 2017: 1,745\n    - 2018: 1,856\n    - 2019: 2,069\n    - 2020: 2,196\n    - 2021: 2,320\n  - Gross reserves (months of next year imports, eop)\n    - 2015: 3.7\n    - 2016 Est.: 3.8\n    - 2017: 4.1\n  - External public debt outstanding (in percent of GDP)\n    - 2015: 63.6\n    - 2016 Est.: 60.7\n    - 2017: 63.0\n    - 2018: 64.4\n    - 2019: 63.1\n    - 2020: 61.1\n    - 2021: 59.4\n\nIMF Press Release No. 16/559 (December 14, 2016), IMF Communications Department.\n\n---\n\n\n References\n\n- The Executive Board\n- Tao Zhang\n- Kyrgyz Republic and the IMF\n- Special Drawing Rights (SDRs) -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- Press Release No. 15/165\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2016/12/15/pr16559-kyrgyz-republic-imf-executive-board-completes-the-third-review-under-ecf"
    }
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    "Published: December 15, 2016",
    "On December 14, 2016, the Executive Board completed the third review of the Kyrgyz Republic’s economic performance under the three-year Extended Credit Facility (ECF) arrangement.",
    "The Board’s approval enables the immediate disbursement of SDR 9.514 million (about US$12.9 million).",
    "Total disbursements under the arrangement would rise to SDR 38.056 million (about US$51.5 million).",
    "The ECF arrangement was originally approved on April 8, 2015, for SDR 66.6 million (about US$92.4 million).",
    "Near-term outlook and risks:",
    "Program implementation and conditionality:",
    "Fiscal policy recommendations:",
    "Monetary and exchange rate policy:",
    "Financial sector and legal framework:",
    "Nominal GDP (in billions of soms)",
    "Real GDP (growth in percent)",
    "Nongold real GDP (growth in percent)",
    "Consumer prices (12-month percent change, eop)",
    "Consumer prices (12-month percent change, average)",
    "General government finances (in percent of GDP) 1/",
    "Banking sector",
    "External sector",
    "[The Executive Board](http://www.imf.org/external/np/sec/memdir/eds.aspx)",
    "[Tao Zhang](https://www.imf.org/en/About/senior-officials/Bios/tao-zhang)",
    "[Kyrgyz Republic and the IMF](http://www.imf.org/external/country/KGZ/index.htm)",
    "[Special Drawing Rights (SDRs) -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/special-drawing-rights-sdr)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[Press Release No. 15/165](http://www.imf.org/external/np/sec/pr/2015/pr15165.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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