International Conference on Eurasian Economies
10-12 July 2017 – Istanbul, TURKEY
Paper detail
Paper ID : 1843
Status : Paper published
Language : Turkish
Topic : International Trade and Globalization
Presenter: Asst. Prof. Dr. Damira Baigonushova
Session : 2B Dış Ticaret II
Sustainability of the Current Account Deficit in Kyrgyzstan
Kırgızistan’da Cari İşlemler Açığının Sürdürülebilirliği
- Asst. Prof. Dr. Damira Baigonushova (Kyrgyz-Turkish Manas University, Kyrgyzstan)
- Asst. Prof. Dr. Junus Ganiev (Kyrgyz-Turkish Manas University, Kyrgyzstan)
- Assoc. Prof. Dr. Nevin Aydın (Artvin Çoruh University, Türkiye)
- Ph.D. candidate Mairam Baigonusheva (Marmara University, Türkiye)
Abstract
Like most developing countries, current account deficit in Kyrgyzstan is one of the ongoing problems. The external dependency on both consumption and production goods and the lack of diversification of export goods, in other words, the formation of export from the unprocessed goods such as gold and some agricultural products further increase the risks in this area. So, in this study, it is aimed to investigate the sustainability of current account deficit in Kyrgyzstan and also its causes for 2000:1-2016:4 time periods. Time series causality, VAR-analysis approach and the Johansen cointegration methods have been used. When the relations between the current account deficits and the important sub-items of this account are examined, it is found out that the current account deficits are mostly affected by net exports and foreign debt interest payments. From a wider perspective, it has been found that the changes in current account deficit are mostly influenced by foreign direct investments. According to the Johansen cointegration test, there is no cointegration between export and import series, which is why Kyrgyzstan's foreign trade deficit is not sustainable. In the short term, the current account deficits, which are being carried out without any very important problems with the help of foreign workers' income, foreign debts and foreign direct investments, may become an important problem in the long run. To prevent this, there is a need for more active and more effective policies in the country to support real sectors that can compete with the rest of the world.
JEL codes: F32, F14, F24
Baigonushova, Damira, Ganiev, Junus, Aydın, Nevin, Baigonusheva, Mairam (2017). "Sustainability of the Current Account Deficit in Kyrgyzstan" in Proceedings of International Conference of Eurasian Economies 2017, pp.178-188, Istanbul, TURKEY.
DOI: https://doi.org/10.36880/C08.01843
