The international rating agency Moody’s has revised Kyrgyzstan’s credit rating from negative to stable, citing unexpected resilience in the country’s economy despite geopolitical tensions and fiscal vulnerabilities, the Times of Central Asia reported.
Moody’s had previously expressed concerns about the potential fallout from Western sanctions against Russia, Kyrgyzstan’s primary trading partner. However, contrary to forecasts, the nation’s economy and budget indicators remained largely unaffected. Foreign investment in the mining sector, a crucial component of Kyrgyzstan’s economy, did not see the significant decline anticipated after the nationalization of the Kumtor gold mine in 2022.
While the upgrade reflects improved economic stability, Moody’s analysts cautioned against overlooking Kyrgyzstan’s public debt, which stands at $6.2bn, and its susceptibility to currency depreciation. The agency emphasized the role of financing from development partners in mitigating debt service costs but underscored ongoing political and external vulnerabilities as potential risks.
Analysts highlighted the influential role of the Kyrgyz government in shaping the nation’s economic trajectory, pointing to the unpredictability of governmental decisions and the volatile domestic political landscape as potential impediments to long-term development. Despite these challenges, Moody’s projected a modest economic growth of 4% for the current year.
Economist Nurgul Akimova attributed the rating change to Kyrgyzstan’s resilient macroeconomic fundamentals. Akimova emphasized the nation’s diversified economic ties, stable key sectors, and continued support from international partners, which have helped sustain economic growth despite external pressures.
Kyrgyzstan’s strategy of diversifying cooperation with multiple countries, exemplified by labor migration to destinations including Russia, South Korea, the United States, and the EU, has bolstered economic stability. Akimova stressed the importance of remittances from Kyrgyz migrants abroad, which contribute to the country's economy and maintain strong ties with their homeland.
The Kyrgyz Ministry of Economy and Commerce welcomed Moody’s revised forecast as a reflection of the country’s balanced risk profile. Minister Dastan Amangeldiev highlighted positive economic dynamics, attributing the upturn to structural adaptations, recovering domestic demand, and increased investment activity.
Recent data from the National Statistics Committee further bolstered optimism, indicating a robust real growth rate of 8.8% in GDP volume for January- March 2024, driven primarily by growth in the service sector and construction.
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