Selected Issues Papers

Potential Output in the Kyrgyz Republic: Kyrgyz Republic

By Nasir H Rao, Anvar Muratkhanov, Nihal Haider

June 18, 2025

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Format: Chicago

Nasir H Rao, Anvar Muratkhanov, and Nihal Haider. "Potential Output in the Kyrgyz Republic: Kyrgyz Republic", Selected Issues Papers 2025, 081 (2025), accessed June 19, 2025, https://doi.org/10.5089/9798229011624.018

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Summary

This paper revisits the potential output of the Kyrgyz Republic considering recent structural shifts and external shocks, including the pandemic and the regional conflict. Utilizing a suite of methodologies – production function, state-space models, and statistical filters – it estimates potential output growth at 5.3 percent, up from around 4.4 percent prior to the pandemic. This increase is primarily driven by capital accumulation and labor force expansion. However, total factor productivity remains below historical averages. The persistently positive output gap points to overheating risks, underscoring the need for counter-cyclical policies and structural reforms.

Subject: Econometric analysis, Financial institutions, Gross capital formation, Inflation, Labor, Labor force, Labor markets, National accounts, Output gap, Potential output, Prices, Production, Stocks, Total factor productivity, Unemployment, Vector error correction models

Keywords: Capital Accumulation, Gross capital formation, Inflation, Labor force, Labor markets, Migration, Output gap, Output Gap, Potential output, Potential Output, Productivity, Stocks, Structural Reforms, Total factor productivity, Total Factor Productivity, Unemployment, Vector error correction models

Publication Details

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