IMF | CCAMTAC

Capacity Development Scoping Visit (October 30 – November 3, 2023).
This visit scoped potential CD support for the State Tax Service (STS) of the Kyrgyz Republic following earlier discussions between CCAMTAC and STS officials (August 2023), and a recent IMF Fiscal Affairs Department (IMF-FAD) tax policy mission. The visit team discussed a number of topics, including the IMF’s compliance risk management (CRM) framework for the large taxpayer segment, transfer pricing and related international taxation.

Tax Expenditure Analysis (December 5 – 16, 2022).

This visit was in response to a request by the Ministry of Finance for TA to enhance the State Tax Service's capacity to better monitor the fiscal impact of value-added tax (VAT) exemptions and preferential treatment. The mission was technical and focused on constructing a VAT simulation model. TA included identifying expenditures in the VAT system of the Kyrgyz Republic, developing a VAT simulation model to estimate the fiscal impact of these expenditures as well as providing initial advice on improvement opportunities and the path forward. Meetings were held with the State Tax Service, as well as with officials responsible for budget revenues at the Ministry of Finance and the formulation and evaluation of tax policy at the Ministry of Economy and Commerce.

Scoping Mission (November 10 – 11, 2022).

 The CCAMTAC advisor joined the IMF Article IV mission and attended scheduled meetings with the State Tax Service and State Customs Service covering administrative reforms.

Value Added Tax Expenditure Analysis (July 4 – 5, 2022).
This CD assignment-initiated stocktaking with the State Tax Service under the Ministry of Finance of the Kyrgyz Republic on tax expenditure analysis with a focus on the effectiveness of value added tax (VAT) exemptions. The assignment took place virtually, while a follow-up in-person visit is planned for September 2022.

Enhancing the fiscal risk statement and long-term fiscal sustainability analysis (November 13-24, 2023).
The mission provided hands-on support for the implementation of the recently adopted Cabinet Decree on fiscal risks and Resolution on State Owned Enterprise (SOE) aggregate reporting. 31 officials were trained on using the FAD SOE Health Check Tool (HCT) to assess the financial health of SOEs and how to interpret and utilize this information to strengthen fiscal risk analysis, management and reporting. Mission outputs included: (i) a populated HCT based on five Kyrgyz SOEs; (ii) a workplan for data submission, compilation and analytical requirements; (iii) a suggested outline for the SOE aggregate report and chapter in the fiscal risk statement (FRS), and (iv) a prototype database with aggregate tables and charts, and guidance for an aggregate SOE report outline. 

Improving Public Financial Management (June 22 – July 5, 2022)

The purpose of this mostly in-person mission was to assist the Ministry of Finance to develop a concept note for relaunching Results Based Budgeting (RBB) reforms, which are expected to improve the efficiency of budget expenditures as envisaged by the National Development Program 2021-2026. The mission provided advice to strengthen the results orientation of the current program budgeting framework and practices and to ensure an enabling institutional and IT environment for the reforms. The experts advised the ministry to include these and other important building blocks in the concept note, which will help steer the next phase of the reforms.

Credit Risk – Standardized Approach (April 24 – 28, 2023).

An in-person engagement with the National Bank of the Kyrgyz Republic was conducted during the final week of April. This engagement was the second and final leg of the planned discussions surrounding credit risk, standardized approach utilized by the authorities. Discussions involved the further alignment opportunities of the existing regulations with Basel standards and included discussions with supervision and policy staff of the authority

Enhancing Risk Based Supervision (January 16 – 20, 2023).

The remote TA mission supported the National Bank in its efforts to enhance its Risk Based Supervision Framework (RBS) and its associated elements. This mission represented the first stage of the planned engagements in RBS and aimed to upgrade the existing risk-based capital regulations, to implement the Standardized Approach (SA) for credit risk. The mission is expected to contribute to the development of capital regulations and ensure that they are aligned with the Basel guidelines.

Enhancing Monetary Operations (October 23 – November 3, 2023).
At the request of the National Bank of the Kyrgyz Republic, MCM IMF and CCAMTAC provided technical assistance on the monetary policy and operations framework. The mission covered issues related to monetary operations, policy ratetransmission, monetary aggregate trends, and the balance sheet issues. Based on extensive discussions, the mission developed a “road map”that straddles reserve requirements, FX and interbank rates, available instruments etc. High andpersistent excess liquidity in the system poses challenges for effective transmission of monetary policy signal to economy given a number of limitations on current monetary operations. Additionally, themission delivered 3-day capacity building training for the staff of the central bank and shared experience from other countries.

Development of REPO Market (October 25 – 28, 2022).

The workshop aimed to familiarize participants from central banks with key features of the repo-operations, use and users of repo, issues related to repo market infrastructure and global practices in building repo market. For peer discussions participants from Kazakhstan, Georgia, and the Kyrgyz Republic shared their experience and challenges at the repo market. At the workshop participants discussed key aspects for developing an effective true repo market. Extensive discussions touched collateral aspects of repo and its link with the securities markets. Participants were interested in issues related to the development of the repo market in conditions of high counterparty risks, excess liquidity in the system, and shallow financial markets.

Liquidity Forecasting (October 3 – 7, 2022).

On the request of authorities, the mission visited the National Bank of the Kyrgyz Republic to assist in setting up a new model developed by the IMF’s Monetary and Capital Market Department. Considering a sharp increase of liquidity in the system effective liquidity management has become critical. The mission assisted the Bank to set up the new liquidity forecasting tool for which automatizes and improves the quality of projections. The staff was trained to use the forecasting techniques for other series as well.

Monetary Policy and Operational Framework (October 8 - November 8, 2021)

The mission was a follow-up to the September–October 2020 mission. It assessed the progress the National Bank of the Kyrgyz Republic has achieved since previous IMF TA missions on the monetary policy framework, including liquidity management, monetary operation and instruments, inflation modeling and forecasting, and yield curve/debt issuance. The mission team discussed monetary operations and policy instruments relevant for inflation targeting and assessed the progress achieved on strengthening the transmission of the National Bank’s monetary policy rate changes on market interest rates. The experts reviewed the calibration of the QPM, as well as tools and procedures used to forecast autonomous factors. The mission also focused on enhancing the National Bank’s liquidity management through improved information exchange with the Ministry of Finance of the Kyrgyz Republic to facilitate cash flow projections for government transactions and commitments to implement a comprehensive strategy.

Monetary and Foreign Exchange Operations (January 15 - April 30, 2021)

The missions reviewed past TA, assessed TA needs and will provide the future CCAMTAC resident advisor on central banking with a preliminary work plan tailored to each country’s needs. At the same time, several cross-cutting themes emerged. Most countries are transitioning to or plan to transition to inflation targeting. Common monetary policy and operations issues relate to high dollarization, foreign exchange intervention policy, the impact of remittances and their volatility on monetary policy, the role of the ruble exchange rate, and the state of correspondent banking. The assessments were shared with the respective country authorities to help inform their capacity development plans.

GFS& PSDS mission (September 18 – 29, 2023).
This mission jointly funded by D4D and CCAMTAC consisted of two segments: i) data work and ii) training. During the first week of data work, the mission reviewed the annual GFS questionnaire for 2022 prepared by the authorities and assisted in eliminating discrepancies. The 2022 GFS questionnaire was transmitted to IMF STA during the mission. The mission also discussed important methodological issues such as appropriate recording of government financial support to public corporations and recording of dividends. The training element of the second week included topics requested by the Kyrgyz authorities such as consolidation in GFS or sector classification. The GFS mission overlapped with the mission conducted by the Real Sector Statistics (RSS) CCAMTAC Resident Advisor at the Statistical Committee (StatKom). The GFS compilers met with StatKom national accounts compilers and agreed on improving exchange of data between CT and StatKom. The mission also overlapped with the mission of the CCAMTAC PFM Resident Advisor which allowed for organizing joint meetings with governmental agencies dealing with the State-Owned Enterprises and explain their representatives the linkages between fiscal risks and the importance of GFS.

Improving the Quality of Annual and Quarterly GFS (September 12 – 23, 2022).

This TA mission was a first CCAMTAC in person mission of the GFS and PSDS workstream. In supporting the authorities’ effort to improve their GFS compilation and dissemination for decision making, the mission focused on: (i) preparing annual GFS for 2021; (ii) compiling quarterly GFS and public sector debt statistics (PSDS); (iii) reviewing progress made in reclassifying the recording of the financial support to loss-making state-owned enterprises (SOEs). As a result of the discussions, the authorities transmitted annual and quarterly GFS to the IMF, and quarterly PSDS to World Bank during the mission. In addition, the authorities also submitted to the IMF fiscal data for the IMF’s Climate Change Indicators Dashboard for the first time. The mission also discussed details of recent recapitalization cases as part of government financial support to the agriculture sector and assessing their possible impact on GFS recording.

Enhancing Government Finance Statistics (GFS) / Public Sector Debt Statistics (PSDS) (April 25–29, 2022)

Following a request from the Ministry of Finance, the CCAMTAC GFS and PSDS resident advisor conducted a remote TA mission on GFS and PSDS. As a follow up of the December 2021 TA mission, the authorities worked with the advisor on the finalization of the annual GFS data for 2020. The finalized data for general government was transmitted to the IMF STA during the mission. The mission also delivered to the staff of Ministry of Finance, National Bank and National Statistical Institute an information session on consistency in macroeconomic statistics and the importance of cooperation between the compiling institutions.

Enhancing GFS/PSDS (December 6-17, 2021)

After having discussed the progress on several methodological issues identified by the previous TA mission in April 2021, the mission team assisted the Kyrgyz authorities in further improving their fiscal and debt data for surveillance and dissemination purposes. The mission supported the compilers in preparation of the annual GFS 2020 dataset, notably the finalization of the reporting for Social Security Funds. In addition, the IMF staff addressed the possibility to resume quarterly GFS and PSDS reporting and guided the authorities in establishing the medium-term action plan for further improvements in GFS and PSDS.

National Accounts mission (May 27–31, 2024). The mission assisted the National Statistical Committee of the Kyrgyz Republic (NSC) in developing discrete time series of quarterly GDP by production (GDP–P). The NSC plans to release discrete time series of quarterly GDP for 2019–23 in 2024. The NSC will also publish quarterly GDP–P estimates for the first quarter of 2024. Starting from the first quarter of 2024, the NSC pans to regularly publish quarterly GDP–P after 90 days from the end of the reporting period (t+90). The quarterly GDP–P estimates are of higher quality compared to the monthly GDP estimates, which are published in t+12 days.

National Accounts mission (February 26–March 7, 2024). The mission assisted the National Statistical Committee of the Kyrgyz Republic (NSC) in reviewing data sources and methods for compiling national accounts and provided recommendations for further improvement. Discussions also related to terminology, e.g. using the term “Monthly flash estimates of economic growth” instead of “monthly GDP”, and compilation techniques of real GDP in transportation, financial intermediation, and real estate services.

Discrete Quarterly GDP (September 5 – 16, 2022).

The National Statistical Committee of the Kyrgyz Republic received an in-person TA in the finalization of discrete quarterly GDP. The committee plans to release quarterly GDP estimates in 2023 in parallel with the implementation of the 2008 System of National Accounts (SNA) and major revision of national accounts time series. The CCAMTAC advisor reviewed outstanding issues related with the implementation of 2008 SNA. The mission also met with the representatives of the National Bank of the Kyrgyz Republic to discuss the compilation of financial accounts. The mission highlighted the importance of financial accounts for the macroeconomic analysis.

Quarterly GDP Estimates (April 18–22, 2022)

The mission team worked with the staff of the National Statistical Committee on the ongoing implementation of quarterly national accounts (QNA) in accordance with international standard and assisted the authorities in improving the national accounts statistics. It reviewed the QNA compilation and provided recommendations for further improvements. It also assisted the committee with the compilation of taxes on products at constant prices.

Refreshing Macroeconomic Framework (November 20 – December 1, 2023).
The mission team visited the Ministry of Economy of the Kyrgyz Republic. The mission team helped the Ministry’s team review and refresh the macroeconomic projection framework.  and (re)train new staff members in using it for the economic outlook update for Budget 2025.  

Macroeconomic frameworks (March 13 – 29, 2023)

CCAMTAC’s regional advisor and a short-term expert conducted a technical assistance mission to the National Bank of Kyrgyz Republic (NBKR). The mission reviewed and validated the performance of NBKR’s central quarterly projection model – key quantitative tool that supports the formulation of NBKR’s inflation targeting policy.