Macroeconomic Forecast Kyrgyzstan

Given that the Kyrgyz economy contracted by 2.2% y-o-y during the first quarter of 2009, and with the recession unlikely to find a bottom until Q209-Q309, we target a full-year economic contraction of 1.6%. To be sure, with exporters suffering as a result of the dire external environment, and with domestic demand weakening as unemployment heads higher and remittances fall, the economy will be hard pushed to avoid a full-year recession in 2009. An improvement in both domestic and external demand conditions beyond 2009 will help lift growth, with the economy forecast to expand by 3.0% and 5.4% in 2010 and 2011, respectively.

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