Kyrgyz deficit to be covered by Russian aid
Kyrgyzstan expects its revenues this year to fall $125 million short of initial expectations, but the gap will be filled by recently secured aid from Russia, the country's finance minister said Tuesday.
The impoverished former Soviet Central Asian nation was given a $150 million grant from Moscow last month, along with $2 billion in loans. Shortly after that aid package was announced, Kyrgyzstan's president announced plans to close a U.S. air base that supports operations in Afghanistan.
The government plans to reduce its budget deficit by using money allocated by Russia, Finance Minister Marat Sultanov said.
Sultanov said the deficit has been caused by falling customs revenues, a recently introduced moratorium on real estate levies, and other tax breaks, reported IHT.
"In the current situation, the expected assistance from Russia will provide concrete support," Sultanov said.
Kyrgyzstan has managed to boost state revenues in recent years, allowing for a modest rise in public sector salaries, but it continues to struggle with annual shortfalls.
Prime Minister Igor Chudinov said last month that the Russian aid money would be kept in reserve and only used in the event of worsening economic conditions.
Kyrgyzstan is likely to be heavily affected by returning migrant laborers unable to find work in Kazakhstan and Russia. Remittances from those workers have been a significant piece of Kyrgyzstan's economy.