This week turned out to be quite eventful. Kyrgyzstan officially announced its GDP volume on the results of the last year and the amount of the country's public debt. The Tax Service reported about its work and pointed out its successes and shortcomings, there is a general rise in the price of goods across the country. This week, negotiations were held to write off the country's national debt in exchange for channeling funds to combat climate change and other important areas, the National Bank announced its reserves and explained the conducing of interventions. An important event was the discussion of the IBC on the termination of the issuance of permits for the mining industry by state bodies.
In general, the events of the week revived some optimism and hopes for a recovery in business activity.
The debt volume. As of Dec. 31, 2020, the amount of Kyrgyzstan's public debt (external + internal) made USD 4 billion 928.67 million (KGS 407 billion 353.36 million).
According to the Finance Ministry of the republic, of these:
- 85.6% is the state external debt: USD 4 billion 220.31 million (KGS 348 billion 807.69 million);
- 14.4% is the state internal debt: USD $708.36 million (KGS 58 billion 545.66).
For January 2021, funds in the amount of KGS 2 million 366.3 thousand were allocated from the republican budget of Kyrgyzstan for servicing of the state debt (external + internal), of which:
- KGS 1 million 477.1 thousand for the public external debt;
- KGS 889.2 million - for the state internal debt.
Results of tax collection. Head of the State Tax Service of the Kyrgyz Republic Kabyl Abdaliev told the achievements and problems of the fiscal body on the results of 2020.
He said that the State Tax Service of Kyrgyzstan collected KGS 62 billion 958 million of taxes to the republican budget, by fulfilling the plan by 100.2% or exceeded by KGS 107.3 million. Compared to 2019, the income increased by KGS 324.7 million.
The overfulfillment of planned tax targets became possible due to a number of factors. In particular, the SMART Salym tax procedures fiscalization projects, including electronic invoices, which started working since July 1, 2020, have yielded results. In addition, work was carried out to analyze and monitor all sectors of the economy, bring businesses out of the shadows, and administer indirect taxes in the framework of trade with the EAEU member states.
In addition, Kabyl Abdaliev noted that the State Tax Service in 2020 collected KGS 33 billion 190.8 million of insurance fees. The established plan was fulfilled by 100.5%, or exceeded by KGS 163 million.
Not enough. The State Tax Service of Kyrgyzstan this week announced in which sectors of the country's economy in 2020 the plans to collect taxes were not fulfilled due to the coronavirus pandemic.
Zamirbek Mamytov, deputy head of the State Tax Service, said that, compared to 2019, the domestic VAT is under-fulfilled by 99.4%, and the import VAT is by 93.6%.
"The main shortfall is in the local budget, where the pandemic really affected," he said and clarified that markets and shops did not work during the quarantine, this affected patents and taxation.
GDP in January. In Kyrgyzstan, in January 2021, the gross domestic product, according to preliminary data, amounted to more than KGS 33.2 billion.
According to data of the National Statistics Committee, this is 7.6% less than the same period in 2020.
Without taking into account the enterprises developing the Kumtor deposit, the volume of GDP amounted to about KGS 30 billion and decreased by 4.5%. The volume of industrial production amounted to more than KGS 22 billion and, compared to January 2020, decreased by 9.5% due to a decrease in industrial production of basic metals and finished metal products by 32.8%.
Foreign trade. The volume of foreign trade in 2020, amounted to USD 5.6 billion and decreased by 19% compared to 2019.
Head of the Department of Summary Works and Distribution of Statistics of the National Statistics Committee of Kyrgyzstan Chinara Turdubaeva said that exports decreased by 1.1% and imports declined by 26.2%.
"The decrease in exports was caused by a 4.1-fold decrease in exports of footwear, 2.2-fold decrease in exports of waste and scrap copper, 1.9-fold decrease in exports of tobacco and tobacco products, 1.9-fold decrease in exports of clothing and clothing accessories, 7 times, crude oil - by 36.1%, cement - 28.8%, cotton fiber - 25.1%, vegetables and root crops - 12.5%, fruits and nuts - 9.4%, glass - by 2.6%,” Turdubaeva said.
Industrial goods. The volume of industrial production in January 2021 amounted to about KGS 22 billion.
According to data of the National Statistics Committee, compared to January last year, it decreased by 9.5% due to a decrease in industrial production of basic metals and finished metal products, except for machinery and equipment (by 32.8%), textile production, clothing and footwear production, leather and leather goods (by 25.5%), oil products (by 6.0%), pharmaceutical products (by 3.3%), as well as in the extraction of minerals (by 21.0%).
Negative trends were observed in construction, where a decrease in volumes was 22.5%, wholesale and retail trade - 12.0%, while in agriculture, on the contrary, there was an increase in volumes by 0.9%.
Price rise. In January 2021, the increase in consumer prices in Kyrgyzstan as a whole amounted to 1%.
Chinara Turdubaeva, the head of the department of summary work and dissemination of statistical information, said that the prices for food products and non-alcoholic beverages increased by 1.7%, alcoholic beverages and tobacco products - by 0.7%, for non-food products - by 0.4%. , while tariffs for services provided to the population decreased by 0.1%.
“The prices for fresh vegetables increased by 7.8%, for potatoes - by 4.7%, edible oils - by 3.8%, for dairy products, cheese and eggs - by 3.5%, fresh meat - by 1.3%. At the same time, the maximum increase in prices (1.5 percent) was recorded in Naryn and Batken Oblasts,” Turdubaeva said.
Request for debts. A meeting was held this week in Bishkek between Deputy Prime Minister-Minister of Economy and Finance of Kyrgyzstan Ulukbek Karmyshakov and UNDP Resident Representative in the Kyrgyz Republic Louise Chamberlain.
During the meeting, the sides discussed issues of the Biodiversity Finance Initiative (BIOFIN), restructuring and debt swap for climate change, assessments of financial development, etc.
As a result of the meeting, the sides agreed to promote the issue and provide UNDP with consulting assistance on restructuring and exchange of debt for environmental protection and biodiversity conservation.
Bank reserves. Reserves of the National Bank of Kyrgyzstan amount to USD 2 billion 740 million.
Chairman of the National Bank Tolkunbek Abdygulov gave an explanation this week to talks about large spending of funds from the reserve and the bank’s foreign exchange interventions.
"If we don't sell dollars, then the exchange rate can go up to KGS 300-400 per dollar. The main goal of the National Bank is to maintain the stability of the som," he said.
Abdygulov noted that earlier, neighboring countries such as Kazakhstan and Russia had a fixed rate, but 4 years ago these countries went into free float because their reserves were not able to withstand.
The head of the National Bank added only about 10 countries worldwide have a fixed exchange rate, usually these are rich countries such as Qatar, Kuwait.
Business problems. The results of an analysis of problematic issues of the business environment in Kyrgyzstan were released this week.
According to the results, among the most pressing problems facing companies, difficulties due to the COVID-19 pandemic are at the head of the rest. In addition, the survey showed that the respondents identified force majeure circumstances (political instability (70.3%), quarantine (56.4%), generally recognized problems: ineffective work of the judicial system, corruption, etc., issues solved by the Government: complex customs procedures and VAT refunds for SMEs, pressure from law enforcement agencies, etc.
Least of all entrepreneurs (6.9%) are worried about the difficulties associated with the acquisition of raw materials and materials. At the same time, 10.9% of entrepreneurs experience difficulties in purchasing, renting and operating of the equipment.
Applications will not be considered. It became known this week that many government agencies of Kyrgyzstan have stopped considering applications and issuing permits to mining companies in connection with changes in the structure of the new government of Kyrgyzstan.
According to the International Business Council of the Kyrgyz Republic, for more than a month the Agency for Environmental Protection and Forestry, the State Commission on Mineral Reserves and the Licensing Commission under the State Committee for Industry, Energy and Subsoil Use of the Kyrgyz Republic do not provide the necessary services.
This industry-critical issue was raised by members of the committee of the International Business Council on mineral resources, which brings together representatives from the country's major mining and consulting companies.
Kabar News Agency
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