2018年-IMF国际货币组织全球_Kyrgyz_Republic_Fourth_and_Fifth_Reviews_under_the_Three_106页_2mb

Kyrgyz Republic: Fourth and Fifth Reviews Under the Extended Credit Facility

Core Content

The International Monetary Fund (IMF) completed the fourth and fifth reviews under the three-year Extended Credit Facility (ECF) arrangement for the Kyrgyz Republic on December 15, 2017, allowing for the disbursement of SDR 19.028 million (about US$26.9 million), bringing total disbursements to SDR 57.084 million (about US$80.7 million). The ECF arrangement was initially approved in April 2015 for SDR 66.6 million (about US$94.2 million). The review highlighted mixed program performance and the need for continued fiscal and structural reforms.

Main Views and Key Information

Economic Recovery and Regional Context

• The Kyrgyz economy is showing signs of recovery, driven by increased gold production, remittances, and growth in key trading partners.
• The regional recovery is still fragile, and the tightening of border controls with Kazakhstan in late 2017 had a limited impact on the economy but could weaken trade and growth if prolonged.
• The economy is expected to grow gradually over the medium term, supported by the improving regional environment, but growth remains below historical norms without major structural reforms.

Inflation and Monetary Policy

• Inflation is normalizing after a low level in 2016, with headline inflation reaching 3.6 percent at end-October 2017, below the NBKR's target range of 5–7 percent.
• Core inflation has been steadily declining due to the lagged effect of the som appreciation.
• The NBKR is maintaining a two-way flexible exchange rate policy and has limited interventions to reduce exchange rate volatility.
• The transition to inflation targeting is welcomed.

Fiscal Consolidation

• Fiscal consolidation remains essential to rebuild buffers and ensure debt sustainability.
• The 2017 fiscal deficit was 0.9 percent of GDP, below the programmed 3.6 percent, due to one-off revenues and an unscheduled Russian grant (0.4 percent of GDP).
• The 2018 deficit target was relaxed to 2.5 percent of GDP, with the authorities committing to cut non-priority spending and domestically-financed investments.
• Permanent fiscal measures, such as the universal child allowance and VAT exemptions, could jeopardize debt sustainability unless offset.

Debt and Financial Sector

• Public debt remains at moderate risk of distress, but the som appreciation has helped reduce the debt burden.
• The total external debt fell from 57 percent of GDP in 2016 to 54 percent in July 2017, due to som appreciation, rephrasing of public investment projects, and the write-off of Russian debt.
• The banking sector is showing signs of recovery, with a reduction in the nonperforming loan (NPL) ratio to 8.1 percent, but vulnerabilities persist.
• Capital adequacy reached 23.8 percent, well above the minimum regulatory requirement of 12 percent.
• The narrowing of correspondent banking relationships (CBRs) continues to impact the banking sector's access to global markets.

Structural Reforms

• The authorities are encouraged to resume structural reforms, particularly in public finance management and the business environment.
• The need to improve the business environment and fight corruption is emphasized to promote private sector-led growth.
• The implementation of a standardized framework for project monitoring and the development of a comprehensive employee register for the general government are critical structural benchmarks.

Risks and Outlook

• Risks remain tilted to the downside, including a slowdown in China, economic setbacks in Russia or Kazakhstan, and a potential weakening of the EEU integration.
• A loosening of fiscal discipline could threaten debt sustainability and price stability.
• The potential strengthening of the dollar could increase debt and banking sector vulnerabilities.
• Upside risks include higher growth in Russia, stronger economic relations with Uzbekistan, and increased trade and investment from China.

Key Documents and Releases

• Press Release: Announced the completion of the fourth and fifth reviews and the disbursement of funds.
• Staff Report: Prepared by the IMF staff, covering economic developments and policy discussions.
• Debt Sustainability Analysis Update: Prepared by the IMF and IDA staff.
• Letter of Intent and Technical Memorandum of Understanding (TMU): Included in the Staff Report and separately released.

Summary of Performance Criteria and Targets

• All end-December 2016 and end-June 2017 quantitative performance criteria were met, except for three indicative targets (ITs).
• The December 2016 IT on tax revenue was missed due to underperformance in tax collection.
• The June 2017 IT on reserve money was missed due to rapid growth of cash outside banks.
• Six structural benchmarks (SBs) were missed, with five proposed to be postponed or modified.
• The authorities agreed to convert one missed IT into a quantitative performance criterion (QPC).

Summary of Selected Economic Indicators (2016–2022)

Conclusion

The Kyrgyz Republic's economic performance under the ECF program was mixed, with some criteria met and others missed. The authorities have taken corrective measures to align with the program, including fiscal adjustments and structural reforms. The IMF encourages the continuation of these efforts to ensure sustainable growth and debt sustainability. The recovery is supported by a favorable external environment, but risks remain, particularly related to the regional economic conditions and the integrity of the financial sector.