The Central Asia Prospect Kyrgyzstan Macroeconomic Indicators Improved in December

ARLINGTON, Va. - Jan. 23, 2014 - PRLog -- Central Asia Prospect Index of Kyrgyzstan Macroeconomic Indicators (CAP KMI)© increased in the region .4 points in December 2013 to 102.6 and a 2.6% increase over October 2013.

The four variables used to calculate the Central Asia Prospect Index of Kyrgyzstan Macroeconomic Indicators (CAP KMI) are 1.) monthly GDP growth, 2.) changes in deposits at commercial banks, 3.) changes in international reserves at the National Bank, and 4.) the stability of the som/dollar exchange rate.  All of these variables showed an improving business environment in Kyrgyzstan at their latest readings, which for January 2014 come from late 2013.  The current reading of the Index is 102.6, up from 102.2 in December (October 2013 = 100).

The monthly increase in GDP from October to November 2013 was 5.5% higher than for the same period in 2012, measured in soms (CPI showed only 2.8% inflation rate).  Major contributions to growth in 2013 have been in construction and industrial production, with agriculture and service sectors growing but not contributing as much to the impressive growth in GDP.

Deposits at commercial banks in the country grew steadily over the preceding 12 months to November 2013, with deposits in the national currency, the som, up 23% and those in foreign currency up 9% from their levels on November 2012, for an increase in aggregate deposits of 25.71% over the previous year.  Deposits in November were 1.94% higher than the level reported in October 2013.   This growth in deposits reflects continued confidence in both the currency and the commercial banking system.

International reserves of $2.145 billion at the National Bank of the Kyrgyz Republic in November 2013 were 8.7% higher than in the previous November and 2.37% higher than in October 2013.  The central bank’s reserves amount to about 40% of the country’s level of imports in the previous year and are nearly 4 times that year’s estimated current account deficit.

For the month of December 2013, the exchange rate of the som was stable, trading at an average of 49.25 to the US dollar (1 som = 2.05 US cents).  The standard deviation of soms per dollar in November 2013 was 0.1669 som.  This stability combined with the healthy reserve position of the central bank augur well for continued cross-border transactions.

Overall, the CAP KMI Index© suggests a positive outlook for business conditions in Kyrgyzstan.

About the Central Asia Prospect

Central Asia Prospect is a website where Dr. Gary Roseman writes about the development of Central Asia and promotes the area’s business and investment opportunities. The focus is on countries in the traditionally-defined Central Asian region - Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan.

About Dr. Gary Roseman

Dr. Roseman worked with investment projects in Uzbekistan and worked on research projects in Kyrgyzstan and Tajikistan. He taught economics in Russia (Irkutsk and Vladivostok) and Ukraine (Donetsk) and also received a Fulbright grant in Dnepropetrovsk, Ukraine, where he researched the developing mortgage market. He has experience teaching in the US and has a PhD and a CPA. Currently, he lives in Virginia and works in Washington, DC.

For Further Information:

Dr. Gary Roseman  /  groseman@centralasiaprospect.com