Kyrgyz Republic: Second Review Under the Three-Year Arrangement Under the Extended Credit Facility and Request for Modification of Performance Criteria: Staff Report; and Press Release

This paper presents key findings of the Second Review for the Kyrgyz Republic under the Extended Credit Facility. Buoyant revenue collection and significant shortfalls in external financing led to a lower-than-programmed fiscal deficit for 2011. The overall health of the banking sector continued to improve but vulnerabilities remain. Strong adherence to the policies agreed under the IMF-supported program has played an important role in achieving economic recovery and macroeconomic stabilization. The fiscal stance for 2012 is appropriate and reflects pressing social and infrastructure development needs.