The industry of the republic achieved sensational results for Kyrgyzstan. This is evidenced by the data of the National Statistical Committee, in which he summed up the results of 2021. According to the agency, the growth in the volume of industrial products produced in the country amounted to nine percent. Moreover, without taking into account the production of gold at the Kumtor deposit, this figure reached 15.6 percent.

What caused such an enviable growth? It is partly due to the restoration of production in Kyrgyzstan after a disastrous 2020, when the industry was forced to reduce production due to anti-COVID restrictions. But, of course, this is not the only reason. The growth of the industry was led by a sharp increase in the production of refined petroleum products (plus 67 percent), rubber and plastic (30), wood, paper and printing products (26 percent). Mineral extraction increased significantly last year (21 percent). In addition, Kyrgyzstan began to produce noticeably more food, beverages and tobacco products (13 percent).

However, despite such encouraging figures, the impact of industry on the growth of the economy as a whole is much more modest. This is due to the fact that the industry accounts for less than 18 percent of the total GDP. Approximately the same picture is emerging with agriculture. The volume of products produced by the agro-industrial complex is steadily increasing, but in the structure of GDP they occupied less than 15 percent at the end of the year. Basically, the gross domestic product of Kyrgyzstan is represented by the so-called service sector. Its share in GDP is 45.2, and growth over the past year reached 6.5 percent.

In general, last year was relatively successful for the economy of Kyrgyzstan. The country's development rate, according to official sources, reached 3.6 percent. But, alas, the population of the republic did not feel any cardinal positive changes. Partly because the growth is again associated, rather, with the recovery from the lockdown and political upheaval (in 2020, the Kyrgyz economy shrank by eight percent). The positive effect is also blurred by high inflation, the level of which has become the most significant in the Eurasian Union.

At the end of last year, the growth of consumer prices and tariffs in Kyrgyzstan broke all anti-records of recent years. The cost of food and beverages increased by an average of 13.3 percent, non-food items - by almost 10 percent, and services - by more than seven percent. Unfortunately, the trend towards a rise in the price of the consumer basket continues to persist in the coming year, which is noticeable by the change in price tags in stores in January.

According to the forecasts of the National Bank, during 2022 inflation will be at the level of 9-10 percent and will decrease to 5-7 percent only in 2023. Such a depressing effect on the consumer market, according to local experts, will have the expected increase in excise taxes on tobacco and alcohol products, as well as the expected increase in tariffs for utilities and higher fuel prices.

What is curious: the Eurasian Development Bank (EDB) is inclined to look at the situation in Kyrgyzstan more optimistically. Inflation in the republic, according to EDB experts, will slow down in the second half of this year and by the beginning of 2023 it will already be seven percent. However, before that, the population will still have to face a temporary increase in prices for vegetables and fruits - due to the drought, which led to a reduction in the harvest.

Direct speech

Akylbek Zhaparov, Chairman of the Cabinet of Ministers of the Kyrgyz Republic

We managed to achieve certain results in the shortest possible time, because at the end of 2020, the republic's GDP was minus 8.6 percent. The decline in gross domestic product was stopped only in March 2021. But despite the fact that the republic is an agrarian country, the development of the agro-industrial complex is at a low level. To solve this problem, the concept of a cluster mechanism was approved, in accordance with which work was carried out to divide enterprises by type of activity into nine main areas.

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