The latest International Debt Report from the World Bank for the year 2023 sheds light on Kyrgyzstan's challenging predicament concerning its external debt. The recent report delves into the key data points and additional insights provided, exploring the nation's financial obligations, debt terms, and creditor composition.
Total External Debt Stocks
Kyrgyzstan is grappling with a substantial external debt, standing at $9.5 bn. This figure is critical, indicating the magnitude of the financial challenges the country faces on the global stage. The report also highlights the external debt stocks as a percentage of exports (265%) and Gross National Income (GNI) (92%), providing context to the nation's economic health.
Debt Service as a Percentage
The report reveals that Kyrgyzstan's debt service accounts for 22% of exports and 8% of GNI. These percentages underscore the significant portion of the country's economic output dedicated to servicing its external debt. Understanding these metrics is crucial for assessing the sustainability of the debt burden.
Net Financial Flows and Inflows
Kyrgyzstan's net financial flows, encompassing both debt and equity, amount to $637mn. Within this, net debt inflows dominate at $619mn, indicating a reliance on borrowing to meet financial obligations. Net equity inflows stand at $18mn, representing another dimension of the nation's financial landscape.
Creditor Composition
Examining the creditor composition provides valuable insights into Kyrgyzstan's international financial relationships. Multilateral creditors, including the World Bank, constitute 49% of the total debt, reflecting a diverse set of lenders. Bilateral creditors make up the remaining 51%, with China and Japan playing significant roles, contributing 41% and 4%, respectively.
Debt Terms and Maturity
The report further presents a breakdown of average terms on new debt commitments from official and private creditors. Understanding grace periods, maturity, and interest rates is crucial for assessing the terms under which Kyrgyzstan incurs new debt. This information aids in evaluating the financial sustainability of the country's borrowing practices.
Long-Term External Debt and IMF Credit
A detailed analysis of long-term external debt stocks reveals the evolution of Kyrgyzstan's financial obligations over the years. The use of IMF credit and Special Drawing Rights (SDR) allocations is also highlighted, showcasing the country's engagement with international financial institutions.
In 2010, Kyrgyzstan's total external debt stocks stood at $4.1 bn, which increased to $8.2 bn in 2018, marking a percentage change of 100%. The debt continued to rise, reaching $9.5bn in 2022, reflecting a further increase of approximately 15.85% from 2018.
Long-term external debt stocks increased from $3.6bn in 2010 to approximately $8bn in 2022, marking a substantial percentage increase of about 122.22%. The public and publicly guaranteed debt from official creditors experienced fluctuations over the years. From 2010 to 2019, there was an increase of approximately 51.02%, rising from $2.45bn to $3.7bn.
The use of IMF credit and SDR allocations fluctuated significantly. In 2010, the value was $307mn, and it peaked at $697mn in 2021, representing a percentage change of approximately approximately 126.99%.
Short-term external debt stocks displayed a noticeable increase from 2010 to 2022, rising from $195mn to $935mn, indicating a percentage change of approximately 379.49%.
Kyrgyzstan's economic landscape, as outlined in the World Bank's International Debt Report 2023, portrays a nation grappling with a substantial external debt burden. The analysis of debt terms, creditor composition, and financial flows provides a comprehensive understanding of the challenges and opportunities facing the country.
Earlier Daryo reported that Afghanistan is currently grappling with a substantial external debt of $3.4 bn. Unfortunately, the report does not provide details on the percentage of external debt in relation to exports and Gross National Income (GNI). Additionally, crucial indicators related to debt service, such as the percentage of debt service relative to exports and GNI, are conspicuously missing from the report.
Analysis based on the World Bank International Debt Report 2023 and additional financial data
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