Asia Regional Integration Center

The economy grew by 3.6% in 2021 after plunging by 8.6% in 2020. Industry recovered by 3.1%, on a solid 21.1% expansion in mining output, overshadowing a 4.8% decline in construction. Services grew by 6.5% on strong growth in trade (up 11.4%), transport (15.6%), and hospitality (14.3%). Agriculture contracted by 5.0% against 0.9% growth in 2020. Private consumption rose, supported by remittances, which jumped 16% in 2021 as the border with the Russian Federation reopened. Investment, however, fell by 5.9% as projects were delayed. Inflation shot up to 11.9% (from 6.3% in 2020) on rising food prices. The fiscal deficit narrowed to 0.3% of GDP in 2021 from 3.3% of GDP in 2020. Falling exports and rising imports increased the current account deficit to 7.0% of GDP, reversing the 2020 surplus of 4.8%. With economic sanctions affecting its main trading partner, economic growth is forecast to slow to 2.0% in 2022, recovering to 2.5% in 2023.