Macroeconomic Indicators

Growth of natural GDP in comparison with the last year is 107,1%, without taking into account the enterprises, working in the field“Kumtor”–107,8%. Thesignificantcontribution to GDP was made by agriculture and services rendered, where the growth rate constituted 104,1% and 111,7% correspondingly. The production growth in industry was reported practically in all spheres.

The high dynamics of economic growth has been caused by continuing raise of export in favorable market opportunities and by extension of internal demand.

The economic growth in 2005 is forecasted to be on the level of 5%*. The real growth of GDP without taking into account the enterprises working on “Kumtor” will be 7% in 2005 due to the fast development of all sectors of economy, that form GDP.

In 2004 the inflationrateswereslowerincomparisonwith the year of 2003. Consumer price index (CPI) constituted 102,8% by December 2003 (5,6% in 2003). According to the evaluation of NBKR the main sources for increase of prices have become non monetary factors of changes for tax rates, prices for petrol and diesel, increase of tariffs in virtual monopolies, seasonal fluctuationsofpricesforagriculturalgoods. Theircontribution is 101,4%. At the same time contribution of monetary factors, including inflationexpectationsofthe population, has decreased to 1,4%, thus, providing restraining influenceundereffectofstrengtheningofnominal exchange rate for som.

The increase of prices for agricultural goods constituted 2,2%. The biggest increase of prices registered for fruits, milk and dairy products, meat and meat products, bread and bakery products, sugar and confectionery, and for non-alcohol drinks. In the result of price increase for construction materials, solid fuel, gas, petrol and diesel the price index for nonfoods has been increased to 3,2%. Price index for paid services to the population has been increased to 2,5% due to the cost increase for educational, public catering and hotel services.

Perspectives of economic growth

The long-term strategy of Comprehensive Development Framework, accepted in the country, will allow providing dynamic political and socio-economic development of the state.
It is planned to provide the decrease of budget deficittill 2,8% to GDP along with annual growth of GDP to 5% in average at the cost of increase of income on the basis of tax reforms, improvement of tax administration, decrease of expenses, liquidation of groundless privileges, also, provision of addressed social protection for poor people.

Although, in absolute figurestheexpensesofstatebudget in forecasted period will increase, but relatively to GDP volume they will decrease from 25,9% in 2000 till 21,8% in 2010. The tax collection will raise correspondingly from 12,1 to 15,0%. According to the planned scenario of development the state external debt will decrease from 137,2% to GDP in 2000 till 72,0% in 2010. The state external debt of the Kyrgyz Republic in 2004 constituted 79 724.7 million soms (85% to GDP).
By 2010 it is expected that the poverty will be twice reduced. The important factor to provide macroeconomic stability will be the decrease of inflationfrom21,5% in 2000 till 6,7% by 2004 and out an active policy to hold the increase of consumer price on the level of 8%, and from 2005 - 5%. The level of inflation,or CP Iin 2004 constituted 2,8%, and exchange rate of som towards USD has been strengthened to 5,81%. At the end of the year the exchange rate was 41.6246 som/USD.The liberal external policy of the state, maximum usage of advantages provided by the membership in WTO and opportunities of regional collaboration allows the country increasing the volumes of export to the level of more than 1/3.