The Kyrgyz government and the National Bank are working to secure 8% GDP growth and keep their 12-15% inflation level. In achieving this, they will reduce the general government budget deficit, raise the average salary, and increase gross agricultural output and industry.

The World Bank has offered Kyrgyzstan USD 24.1 million in grants under the Agricultural Investments and Services project. The project is aimed at improving pasture management, information systems, and the development of veterinary and counseling services. The project is to last 5 years and the first installment will be transferred to Kyrgyzstan in the summer of 2008.

Kyrgyzstan will be forced to import 400 thousand tones of wheat in 2008 according to the head of the State and Material Reserves Foundation Analytical Department. Annual wheat consumption in Kyrgyzstan equals nearly 1.2 million tones. The reason for the massive import is related to the sowing area of wheat in Kyrgyzstan is drastically dropping in area. The government is expected to hold negotiations about additional wheat supplies with Kazakhstan.

The Kyrgyz Prime Minister has dismissed the heads of four electricity distribution companies and has already replaced them. The countries electricity system has faced losses up to 39 percent of the overall output through technical hitches within the first six months of this year. The successors of the dismissed heads have been instructed by the Prime Minister to cut the losses by 32 percent, which according to a public activist are mainly due to mismanagement, corruption and theft.

According to a deputy Russian foreign minister, the Shanghai Cooperation Organization (SCO) is interested in involving energy-rich Turkmenistan in its activities. The SCO has offered Turkmen President Gurbanguly Berdymukhammedov an invitation to attend Thursday's meeting in the Kyrgyzstan capital of Bishkek. The possibility of establishing an energy club will be touched upon by the heads of state from Kazakhstan, China, Russia, Tajikistan, Uzbekistan, and Kyrgyzstan. Pakistan, India, Mongolia, and Iran will be in attendance as well, considering the four nations role in the SCO, which is observer status.

Utility analysts in Kyrgyzstan are anticipating the possibility of suspending electricity exports to neighboring Central Asian nations of Uzbekistan and Kazakhstan due to a drop in flow through hydroelectric plants at the republic's largest artificial water reservoir. In 2006, the reservoir maintained 16.7 billion cubic meters of water whereas currently it is at a level of 13.6 billion cubic meters. Analysts predict the 2008 water level to hover around only 7.5 billion cubic meters. This possibility will affect how Kyrgyzstan consumes energy and relying more upon natural gas and other fossil fuels.

Central Asian experts are warning that although Kyrgyz bread prices have stabilized recently, prices may start to increase again. The price of bread is increasing because the costs of domestic wheat production as well as grain import costs have risen simultaneously. In response to the large increase in bread prices, the Kyrgyz government has announced that it will open grain reserves and sell it to local bakeries for a low price.

Development is necessary in rural Kyrgyzstan, but without the help of the government, farmers may not be able to access the banking services and loans that they need. There is a high risk attached to loans to farmers because the Kyrgyz government does not provide insurance for the agricultural industry which results. Unfortunately for farmers, the chairman of parliament's tax committee states that insurance for farmers is not currently within the state's budget.

Kyrgyzstan's government has lifted the state monopoly on the production of alcoholic drinks but not on the sale of pure ethyl alcohol. Currently, the alcohol industry is not profitable for the government due to illegal imports and homemade alcohol. The new law is aimed to increase government revenue raised through taxes on legal alcohol sales.

Economic experts with News Briefing Central Asia (NBCentralAsia) are saying that official statistics showing that the Kyrgyz economy grew rapidly in the first half of 2007 are inflated. These experts believe that, in reality, the country is barely beginning to recover from a 2-year plunge. Kazakh investment has indeed spurred boom figures in some sectors, but estimates of a gray economy accounting for 40 to 60 percent of the entire economy show why these boom figures have not translated into higher budget revenues.