## IMF Executive Board Completes the Third Review Under the Extended Credit Facility Arrangement for the Kyrgyz Republic

_IMF News, December 15, 2016_

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**Canonical URL:** [IMF Executive Board Completes the Third Review Under the Extended Credit Facility Arrangement for the Kyrgyz Republic](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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## Bibliographic details
- Published: December 15, 2016

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### Board decision and financing
- 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).

### Assessment, risks, and policy recommendations
- Near-term outlook and risks:
  - “While pressures on the economy are moderating, the near–term outlook remains challenging.”
  - A subdued external environment and weak domestic demand are constraining growth prospects.
  - Debt and financial sector vulnerabilities remain elevated.
  - Program risks cited include dwindling commodity prices, protracted regional recovery, and policy slippages in the run-up to the 2017 presidential elections.
- Program implementation and conditionality:
  - 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.
- Fiscal policy recommendations:
  - “A full commitment to growth-friendly fiscal consolidation envisaged under the program is critical to maintaining public finances on a sustainable path.”
  - Consolidation should be underpinned by credible and permanent revenue and expenditure measures.
  - Specific measures recommended: increasing tax revenues, reducing the wage bill, streamlining nonpriority spending, improving the public investment framework.
  - Introducing a fiscal rule is recommended to support fiscal discipline.
- Monetary and exchange rate policy:
  - 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.
  - The planned gradual transition to inflation targeting is welcomed.
- Financial sector and legal framework:
  - While the adopted Banking Law includes some improvements, the dropping of key provisions by Parliament and recent amendments weaken the Law.
  - 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.

### Key macroeconomic findings and projections (selected indicators, 2015–21)
- Nominal GDP (in billions of soms)
  - 2015: 430.5
  - 2016 Est.: 452.0
  - 2017: 486.2
  - 2018: 518.5
  - 2019: 569.9
  - 2020: 622.7
  - 2021: 674.7
- Real GDP (growth in percent)
  - 2015: 3.5
  - 2016 Est.: 2.6
  - 2017: 2.3
  - 2018: 2.9
  - 2019: 5.9
  - 2020: 5.3
  - 2021: 4.3
- Nongold real GDP (growth in percent)
  - 2015: 4.5
  - 2016 Est.: 2.4
  - 2017: 2.8
  - 2018: 3.9
  - 2019: 5.0
- Consumer prices (12-month percent change, eop)
  - 2015: 3.4
  - 2016 Est.: 1.5
  - 2017: 4.7
  - 2018: 5.5
  - 2019: 5.2
  - 2020: 5.1
- Consumer prices (12-month percent change, average)
  - 2015: 6.5
  - 2016 Est.: 0.8
- General government finances (in percent of GDP) 1/
  - Revenue
    - 2015: 35.6
    - 2016 Est.: 38.0
    - 2017: 36.3
    - 2018: 35.4
    - 2019: 35.1
    - 2020: 35.0
    - 2021: 35.2
  - Of which: Tax revenue
    - 2015: 19.1
    - 2016 Est.: 21.6
    - 2017: 21.9
    - 2018: 22.1
    - 2019: 22.3
    - 2020: 22.5
    - 2021: 22.7
  - Expense
    - 2015: 30.1
    - 2016 Est.: 32.5
    - 2017: 30.5
    - 2018: 29.7
    - 2019: 29.3
    - 2020: 28.9
  - Gross operating balance
    - 2015: 5.7
    - 2016 Est.: 5.8
    - 2017: 6.1
    - 2018: 6.3
  - Net acquisition of nonfinancial assets
    - 2015: 6.6
    - 2016 Est.: 10.0
    - 2017: 8.7
    - 2018: 7.2
    - 2019: 7.3
    - 2020: 7.6
    - 2021: 7.8
  - Overall balance (net lending/borrowing)
    - 2015: -1.2
    - 2016 Est.: -4.5
    - 2017: -3.0
    - 2018: -1.6
    - 2019: -1.5
  - Overall balance including onlending
    - 2015: -3.2
    - 2016 Est.: -7.9
    - 2017: -6.2
    - 2018: -4.0
  - Total public debt 2/
    - 2015: 65.0
    - 2016 Est.: 62.1
    - 2017: 64.2
    - 2018: 65.5
    - 2019: 62.0
    - 2020: 60.3
- Banking sector
  - Reserve money (percent change, eop)
    - 2015: 4.0
    - 2016 Est.: 27.7
    - 2017: 9.7
    - 2018: 9.3
    - 2019: 8.6
    - 2020: 8.1
  - Broad money (percent change, eop)
    - 2015: 14.9
    - 2016 Est.: 16.1
    - 2017: 12.5
    - 2018: 10.9
    - 2019: 10.8
    - 2020: 8.8
  - Credit to private sector (percent change, eop)
    - 2015: 17.2
    - 2016 Est.: 11.2
    - 2017: 14.1
    - 2018: 14.4
    - 2019: 11.4
    - 2020: 10.4
  - Credit to private sector (in percent of GDP)
    - 2015: 22.4
    - 2016 Est.: 23.9
    - 2017: 24.9
    - 2018: 25.4
    - 2019: 25.8
- External sector
  - Current account balance (in percent of GDP)
    - 2015: -10.9
    - 2016 Est.: -10.0
    - 2017: -13.6
    - 2018: -13.8
    - 2019: -11.9
    - 2020: -11.7
    - 2021: -11.5
  - Export growth (percent change)
    - 2015: -21.5
    - 2016 Est.: -0.1
    - 2017: 6.0
    - 2018: 5.6
    - 2019: 14.3
    - 2020: 10.3
  - Import growth (percent change)
    - 2015: -27.1
    - 2016 Est.: 4.2
  - Gross International reserves (in millions of U.S. dollars)
    - 2015: 1,468
    - 2016 Est.: 1,680
    - 2017: 1,745
    - 2018: 1,856
    - 2019: 2,069
    - 2020: 2,196
    - 2021: 2,320
  - Gross reserves (months of next year imports, eop)
    - 2015: 3.7
    - 2016 Est.: 3.8
    - 2017: 4.1
  - External public debt outstanding (in percent of GDP)
    - 2015: 63.6
    - 2016 Est.: 60.7
    - 2017: 63.0
    - 2018: 64.4
    - 2019: 63.1
    - 2020: 61.1
    - 2021: 59.4

*IMF Press Release No. 16/559 (December 14, 2016), IMF Communications Department.*

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## References

- [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)

_Source: https://www.imf.org/en/news/articles/2016/12/15/pr16559-kyrgyz-republic-imf-executive-board-completes-the-third-review-under-ecf_