Analytics
The best Experts' Views, Marks and Forecasts on Economics >>
-
9 December 2011
Kyrgyz Government promises to reduce budget deficit
BISHKEK, The Kyrgyz Government will meet all social and other obligations planned for the current year budget, the acting Prime Minister of Kyrgyzstan Omurbek Babanov stated.
According to him, the Government has reduced part of the budget deficit due to additional revenues from the State Customs Service, issuance of government securities, the return of budgetary loans, savings, and cost optimization.
"The Central Treasury of the Ministry of Finance has accumulated enough funds to finance the commitments made by the Government. We’ll fully fund costs related with natural disasters, winter maintenance of roads and other priorities," said Babanov.
As a result of budget implementation in 2011, about 2.0 billion soms will be reserved for budget expenditures for 2012. Taking into account additional resources and cost optimization, the state budget deficit, initially approved at 20.8 billion soms, will be reduced to about 3.0 billion soms.
The Ministry of Finance has offered to reduce the operating costs of the state budget and to improve the deficient performance. Thus, about 2.5 billion soms would be saved on the costs to increase the salaries of social workers. In addition, the savings would be due to the exchange rate of the national currency. In order to cover the budget deficit, the Ministry also intends to issue 1.5 billion soms in government bonds.
Debts and investments
According to the Ministry of Finance, the peak of payments on Kyrgyzstan’s external debt will be in 2018-2024. During this period the payments to cover the external borrowings from the state budget will be between $125 million and $160 million.
As of November 1, 2011, Kyrgyzstan’s foreign debt was estimated at $2.755 billion. According to the forecast, it will reach 55 percent of GDP by the end of 2011.
A number of investment projects have failed because of a lack of funding in the northern region of Kyrgyzstan in 2011. Investment projects of 719.6 million soms were planned in the Naryn Oblast, but only 518.5 million were mastered. In the Issyk-Kul Oblast, there were 122 investment projects, estimated at 2.2 billion soms, of which only 869.4 million were provided. In the Talas Oblast, 106 projects were scheduled at 2.1 billion, of which only 347.4 million were financed.
EurAsEC credit
Kyrgyzstan has to refine the allocation of the credit from the EurAsEC Anti-Crisis Fund. The process of allocating of $106.7 million is related with certain technical parameters, explained Babanov. "We need to develop this issue, and the Fund would review the allocation of this amount in early 2012," he said.
Kyrgyzstan applied for EurAsEC Anti-Crisis Fund loan for the country's economic recovery after the events of 2010.
The Council of the EurAsEC Anti-Crisis Fund decided to defer the consideration of the $106.7 million loan to Kyrgyzstan until the beginning of 2012. The Council discussed the issue for a long time and found it appropriate to consider it further at the next board meeting, referring to the more efficient use of these funds.
According to the agreements that were reached during the meeting of the EurAsEC Council, Kyrgyzstan has to develop special programs for the use of the funds provided by the EurAsEC Anti-Crisis Fund according to the agreements and statutory activities of the Fund.
Global competitiveness
According to Global Competitiveness Index 2011-2012, Kyrgyzstan ranks the 126th of 142 countries. Kyrgyzstan is followed by Nigeria, Zimbabwe, Angola and other African countries. China is at the 26th place, Russia 66th, Kazakhstan 72nd, and Tajikistan 105th.TCA,BY MARIA LEVINA
