This week has somewhat revitalized the country's business sector. Acting Prime Minister of Kyrgyzstan held a friendly meeting with representatives of business associations and discussed their problems, India expressed interest in cooperation with the Kyrgyz Republic in the field of medicine, the National Bank of the country announced about the discount rate, and remittances to the country slightly increased, there are gold and foreign exchange reserves in sufficient volume. Meanwhile, the EAEU countries are gradually increasing mutual settlements in national currencies, while Kyrgyzstan has increased trade in the national currency with Kazakhstan, the Ministry of Agriculture of the Kyrgyz Republic has allocated large funds for leasing agricultural machinery to the country's farmers.
In general, the week proved to be noticeably active, responding positively to the stability in the country after the last presidential elections.
Tax return. This week, it was announced that 388.3 thousand taxpayers submitted the Unified Tax Return in 2020.
According to data of the State Tax Service of Kyrgyzstan, out of them 48 thousand 896 are organizations (legal entities), which is 2541 more than in 2019.
In addition, the declaration was submitted by 158 thousand 775 individual entrepreneurs, 88 thousand 166 individuals, 44 thousand 987 individuals who do not have taxable income, as well as 47 thousand 486 state and municipal employees.
Alone with business sphere. Acting Prime Minister of the Kyrgyz Republic Artem Novikov and heads of business associations and entrepreneurs discussed current business problems and ways to solve them.
IBC Executive Director Askar Sydykov raised the issue of personnel policy in government agencies. It is necessary that government officials understand how business works and know how to work with investors, he said.
The IBC head also expressed the business's opinion on the implementation of national projects, including the Manas International Airport project.
The participants of the meeting also spoke about the fight against corruption. Business fears that the risks of pressure on business may continue.
Such an informal meeting (business lunch) of entrepreneurs with Novikov took place for the second time in recent months.
India's interest. Deputy Director of the fourth political department of the Ministry of Foreign Affairs of Kyrgyzstan Sagynbek Ibraev at a meeting with Ambassador of the Republic of India to the Kyrgyz Republic Alok Amitabh Dimri discussed issues related to the implementation of bilateral projects in the field of education, tourism, film industry, agriculture, etc.
The ambassador of India expressed interest in cooperation on the creation of joint cooperatives for the production of finished agricultural products, as well as the study of the properties of Kyrgyz medicinal herbs and the creation of their catalog.
National Bank’s rate. This week the National Bank of Kyrgyzstan declared that it has kept the discount rate at 5%.
The spread of the COVID-19 pandemic in the world, the volatility of world prices in commodity markets and the heterogeneity of the development of the world economy continue to negatively affect the development of the countries of the region and the economy of the Kyrgyz Republic, in particular, the National Bank said.
“Economic activity in Kyrgyzstan remains low. A significant decline in production volumes is observed in almost all sectors of the economy, except for agriculture. The Kyrgyz economy’s positive sustainable growth rates will largely depend on the epidemiological situation in the country and the speed of recovery of the economies of the trading partner countries.
At the same time, the National Bank reported the growth of remittances to the country.
At the end of January-November 2020, the net inflow of remittances to Kyrgyzstan amounted to USD 1.7 billion, an increase of 1.2% compared to the same indicator in 2019.
Stock of reserves. It was announced this week that the international reserves of the National Bank of the Kyrgyz Republic are at a sufficient level - USD 2.8 billion and cover about 6 months of the possible volume of imports of goods and services.
The level of dollarization of the economy remains low: by the end of 2020, the dollarization of deposits amounted to 42.9%, having increased over the year by 4.7 percentage points, while the dollarization of loans, on the contrary, decreased by 2.2 percentage points up to 32.9%.
The National Bank of the Kyrgyz Republic said that the volatility in commodity markets, continued restrictions in a number of countries due to the COVID-19 pandemic and the associated low expectations of global economic growth determine volatility in global financial markets.
During 2020, an excess of demand for foreign currency over its supply was noted in the domestic foreign exchange market, which led to foreign exchange interventions by the National Bank to smooth out sharp fluctuations in the exchange rate.
The volume of foreign exchange interventions for the sale of foreign exchange in 2020 amounted to USD 518.5 million.
Rates are down. A decrease in interest rates on loans is observed in Kyrgyzstan.
According to data of the National Bank of the Kyrgyz Republic, interest rates on loans in the country have a downward trend: in January-November 2020, the weighted average rate on loans in the national currency decreased by 1.3 percentage points up to 16.2%, on loans in foreign currency - by 0.4 percentage points up to 9.3%.
At the same time, there was a slight increase in the share of overdue loans and prolonged loans in relation to the loan portfolio (at the end of November 2020 it amounted to 2.6% (+0.8 p.p. from the beginning of the year) and 14.1% (+11.5 p.p. from the beginning of the year), respectively).
The memorandum was signed. This week, the Business Ombudsman and the Ministry of Economy of the Kyrgyz Republic signed a Memorandum on cooperation.
The goal of the document is to establish effective cooperation to ensure transparent activities of public authorities, to form directions for development in the field of business policy, to implement measures to prevent corruption and other violations of the rights and legitimate interests of entrepreneurs, to provide support in the development and promotion of recommendations that improve the conduct of business in the country.
Weight of national currencies. The share of payments in national currencies in trade between the EAEU countries increased from 63% to 74%.
According to a statement by Natalya Lavrova, the head of the macroeconomic analysis and statistics department of the Eurasian Fund for Stabilization and Development Project, during an online presentation, the dollarization level decreased from 25% to 19%.
“These are significant successes. It is worth relying on the trends to continue,” she said.
Lavrova said that Russia has a leading position - 70%, the share of other countries of the union - 2%.
“The high presence of the ruble is explained by the importance of the Russian economy, which forms the backbone of the EAEU countries. For example, the share of the ruble is 69% in trade with Kazakhstan and Kyrgyzstan, 80% in trade with Belarus. If you look at the data without Russia, then the calculation indicators are not so significant,” she added.
Trade with Kazakhstan. Kyrgyzstan is building up its positions in trade in national currency with Kazakhstan among the EAEU countries.
Natalia Lavrova
, the head of the macroeconomic analysis and statistics department of the Eurasian Fund for Stabilization and Development Project said that Kyrgyzstan managed to bring trade with Kazakhstan from 1% to 2%.
“Of course, further success will depend on the development of trade and activity. In terms of developing trade with third countries, the level of currency diversification will be an important point,” she said.
Natalya Lavrova said that the share of som in trade with Russia is also 2%.
Leasing in agriculture. Kyrgyzstan allocated KGS 540.9 million for the development of leasing of agricultural machinery.
According to data of the country’s Agriculture Ministry, the corresponding order was signed by Acting Prime Minister Artem Novikov. Financial means at a rate of KGS 540.9 million will be allocated to agricultural producers of the republic through Aiyl Bank with possibility of repayment of main sum twice a year.
“This opportunity will allow to renew the machine and tractor fleet of the republic and increase the technical potential of the agricultural sector, and thereby increase the yield of crops and overall agricultural production.
"I am glad that the proposal of the ministry is supported by the government and that farmers will be able to qualitatively upgrade the equipment and purchase the necessary equipment," Agriculture Minister Tilek Toktogaziev said.
Kabar News Agency
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