Presidential elections loom
Overview:
The economy is slowly starting to recover from the disruptions caused by last year’s political upheaval. It returned to positive growth in Q1. However, economic imbalances are growing rapidly due to high food and fuel prices. The Kyrgyz Republic (KR) is particularly vulnerable here as a net importer of both. Inflation has increased rapidly forcing the central bank to hike its key monetary policy rate. The current account deficit is widening and the fiscal deficit is large. The government is considering applying for a new IMF program (beyond the current emergency assistance) to help deal with these economic problems. Presidential elections at the end of this year are the key political focus despite the move to a more parliamentary form of government. This may impact on government stability.