Page 11 - Small Stans and Causcasus Outlook 2022

2.1.2 External environment
Kyrgyzstan’s economy remains reliant on gold exports - however, since
the government early last year grabbed control of Kumtor gold mine
from Canadian miner Centerra Gold, no reliable data has emerged on
Kumtor’s actual gold sale figures. Different members of the president’s
cabinet have cited various figures, with clear contradictions.

Imports flowing into Kyrgyzstan entered into a recovery in 2021 on the
back of the overall removal of some restrictions on trade that appeared
globally in 2020 amid the pandemic.

According to the IMF, the ex-Soviet state’s 2021 current account
balance is expected to deliver a deficit of 7.7% (previously seen at
8.2%) of GDP.

2.1.2 Inflation and monetary policy

Kyrgyzstan's consumer prices moved up by 12.3% y/y in November,
latest data published by the country's national statistics body shows.
High inflation in Kyrgyzstan is one side effect of the pandemic. High
inflation continued to prevail last year amid the visible path towards
economic recovery.

Kyrgyz consumer prices averaged 12% in the January-November
period of 2021, according to official figures, up from an average of 6%
recorded for the same period of 2020.

Kyrgyzstan’s central bank raised its policy rate by 50 bp to 8% on
November 29, its fourth rate hike in a row. The regulator is likely to raise
the rate further if, as expected, the international trend for higher inflation
continues.

The IMF forecast Kyrgyz consumer price inflation at 13% (previously
8.6%) in 2021.

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