A strong economic rebound
Overview:
The Kyrgyz Republic (KR) has managed to cope with the global financial crisis relatively well. While growth slowed last year it remained positive and the economy is now showing signs of a robust rebound. The current account deficit and inflation have both fallen sharply. This sound performance has been assisted by appropriate policy responses from the authorities: allowing exchange rate flexibility; cutting interest rates; and loosening fiscal policy. Many structural challenges remain such as improving energy security. However, a large loan from Russia will go a long way to financing related projects. Strong economic management – as confirmed by good performance under the IMF program – has not been complemented by democratic reform. Hopes raised by the Tulip Revolution have been disappointed.