The economic and business environment this week showed that the negative impact of the pandemic and its consequences on the business life of the entire country is still negative. This week it was announced that the country's GDP decreased over this period by more than 7%, prices for basic products are slowly but steadily growing, the dollar exchange rate has also increased, and the country's energy companies have announced that they have to buy electricity from Kazakhstan. Due to the fact that the peak of the external debt payment is approaching, it was decided to open a special account to collect voluntary donations from the citizens of the country.
Against this background, it is encouraging to agree with Russia on the phased restoration of financial assistance to Kyrgyzstan, as well as a detailed discussion of bilateral trade between Kyrgyzstan and Turkey.
Overall, the week's business events continued to be seen as part of the necessary actions and efforts during the pandemic to restore normalcy in the country.
Explanation of import. This week, Electric Stations OJSC explained why Kyrgyzstan will import electricity from Kazakhstan in winter 2020.
Due to the fact that since 2019 there has been a low-water cycle in the Naryn-Syrdarya river basin, it is expected that the required volume of water in reservoirs in the river basin for generating electricity at power plants is expected until the end of the heating season. By the beginning of 2020, the volume of water in the reservoir of the Toktogul HPP was 14.9 billion cubic meters, which is 1.8 billion less than last year.
The actual inflow of water into the Toktogul reservoir in the growing season of 2020 was 90% of the average long-term norm. In order to preserve water and energy resources and ensure the required volume of water in the Toktogul reservoir to cover the country's domestic electricity needs, there is a need to import electricity to Kyrgyzstan in 2020.
In this regard, a Protocol was signed between the water management and energy departments of Kyrgyzstan and Kazakhstan in May 2020. According to the protocol, Kazakhstan will supply electricity to Kyrgyzstan in the period from September to December 2020 in the amount of 500 million kWh on an even daily schedule, at a price of 2.4 cents per 1 kWh.
Financial flow will be restored. First Deputy Prime Minister of the Kyrgyz Republic Artyem Novikov met this week in Moscow with Deputy Head of the Presidential Administration of the Russian Federation Dmitry Kozak and agreed on the issue of a phased resumption of Russia's financial assistance to Kyrgyzstan.
During the talks, the sides also discussed the current state and prospects for the development of the socio-political situation in Kyrgyzstan, the press service of the Kyrgyz government reported.
Repayment method. This week the Ministry of Finance of Kyrgyzstan proposed a draft resolution of the Government of the Kyrgyz Republic "On the accumulation of funds to pay off the external debt of the Kyrgyz Republic."
According to the document, the goal and task of the project is to reduce the burden on the state budget to pay obligations to foreign donors and international financial institutions, as well as to accumulate funds voluntarily transferred by legal entities and individuals to pay off the external debt of the Kyrgyz Republic.
The draft resolution was initiated in connection with incoming requests from the population regarding assistance to the Government in repayment of the external debt of the Kyrgyz Republic, as well as in order to ensure the accounting of the receipt and use of funds for repayment of external debt.
Expensive meat. The issue of a sharp rise in meat prices has been repeatedly raised this week in Kyrgyzstan. The State Agency for Antimonopoly Regulation named the reasons for the price increase.
The rise in prices for meat is associated with the introduction of restrictive protective measures by Kazakhstan on the export of meat in live weight.
In general, the increase in prices is associated with the decision of Kazakhstan to introduce a moratorium on the export of meat due to the explosive growth in the volume of shipments of cattle to Uzbekistan, which quadrupled over the past year - from 39 thousand heads in 2018 to 156 thousand heads in 2019. This became one of the factors behind the significant rise in meat prices in Kazakhstan itself.
Trade with Turkey. As part of a working visit to Turkey this week, Minister of Foreign Affairs of Kyrgyzstan Ruslan Kazakbaev held a meeting with co-chairman of the Turkish part of the Kyrgyz-Turkish Business Council Aydin Misachoglu and co-chairman of the Kyrgyz part of the Kyrgyz-Turkish Business Council Temirlan Sarlykbek uulu.
Kazakbaev informed the participants of the meeting about the stabilization of the internal political situation in the country and the upcoming important political events in Kyrgyzstan, the current activities of the country's leadership and government aimed at resolving socio-economic issues, combating coronavirus, constitutional reform, radical reforms in a number of urgent tasks, starting with the fight against corruption up to the implementation of systemic, phased measures to promote constitutional reform, reforms in the judiciary, law enforcement, as well as in the health care and education systems.
At the meeting, the Kyrgyz minister emphasized that the events that took place in the Kyrgyz Republic in October did not pose any threats to investors and businessmen, in particular Turkish, and assured of the readiness of the Kyrgyz side to continue protecting the rights of Turkish investors and ensuring the safety of Turkish citizens staying on the territory of Kyrgyzstan. The minister also said that representatives of the Kyrgyz government in the regions were instructed to take under special control the issue of ensuring the safety of each mining enterprise in the regions.
Again intervention. This week, the National Bank of the Kyrgyz Republic was again forced to intervene to maintain the som exchange rate.
A total of USD 26.8 million were sold.
This is already the 18th intervention for this year and the first in November 2020.
The US dollar rate in Kyrgyzstan has already risen to KGS 85.
GDP is not growing. The GDP of Kyrgyzstan in January-October 2020 amounted to about KGS 457 billion and, compared to January-October 2019, decreased by 7.4%.
According to the National Statistics Committee of the Kyrgyz Republic, excluding enterprises for the development of the Kumtor deposit, the volume of GDP in January-October 2020 amounted to more than KGS 402 billion and decreased by 8.3%.
Trade turnover. The volume of foreign and mutual trade in goods of Kyrgyzstan in January-September 2020 amounted to USD 4.2 billion.
According to data of the National Statistics Committee of the Kyrgyz Republic, this indicator decreased by 17.6% compared to January-September 2019, while export supplies increased by 10.5%, while import receipts, on the contrary, decreased by 28.1%.
The volume of mutual trade of the republic with the EAEU member states in January-September 2020 amounted to about USD 1.8 billion and, compared to January-September 2019, decreased by 12%.
At the same time, export deliveries decreased by 12%, and import receipts - by 11.9%. The largest share of the republic's mutual trade with the EAEU member states fell on Russia (64.6%) and Kazakhstan (33.4%).
What about the manufactured goods? The volume of industrial production in January-October 2020 amounted to about KGS 265 billion.
The National Statistics Committee of the Kyrgyz Republic announced this week that the country's industry indicator decreased by 3.6% compared to January-October last year due to a reduction in the production of petroleum products - by 55.1%, textile production, clothing and footwear production, leather and leather products - by 22.3%, wood and paper products, printing activities - by 19.3%, rubber and plastic products, other non-metallic mineral products - by 9.6%, in the production of food products (including drinks) and tobacco products - by 5.4%, as well as in the extraction of minerals - by 16.8%.
It is noted that negative trends were observed in construction, where the decrease in volumes was 11.5%, in wholesale and retail trade - 16.0%, while in agriculture, on the contrary, there was an increase in volumes by 0.8%.
Rising prices. In January-October 2020, the increase in consumer prices in Kyrgyzstan as a whole amounted to 5.3%.
The National Statistics Committee of the Kyrgyz Republic reported that at the same time, prices for food products and non-alcoholic beverages increased by 9.6%, alcoholic beverages and tobacco products - by 5.8%, tariffs for services rendered to the population - by 1.7%, prices for non-food products - 0.5%.
Kabar News Agency
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