Original research

THE MODEL OF SUSTAINABLE DEVELOPMENT OF KYRGYZSTAN’S FINANCIAL ECONOMY WITH THE OPTIMISATION OF INTER-BUDGETARY RELATIONS

Pages 9-16

10.61552/geh.2025.01.002

Arzybek O. Kozhoshev, Urmatbek A. Bidinov

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Abstract This paper is devoted to the development of a model for the sustainable development of Kyrgyzstan’s financial economy with the optimisation of regulation of inter-budgetary relations. To address this, we conducted an econometric study based on statistical data from the Kyrgyz financial economy over the last two decades (2004-2023). The model contains disclosed economic and mathematical dependencies of the sustainability of the financial economy of Kyrgyzstan on the regulation of inter-budgetary relations. The model also contains the prepared alternative forecasts of the sustainability of the financial economy of Kyrgyzstan with various regulations of inter-budgetary relations by 2040. In addition to this, the model covers applied solutions for the optimisation of regulation of inter-budgetary relations in Kyrgyzstan. The main conclusion is that the sustainable development of Kyrgyzstan’s financial economy in the horizon of strategic planning until 2040 requires optimisation of regulation of inter-budgetary relations. The author's recommendations will help perform it. The model strengthens the scientific and methodological support of the coordination of regulatory and private-commercial segments of the Kyrgyz financial system, which leads to its theoretical contribution. The model outlines the perspective of the sustainable development of Kyrgyzstan’s financial economy with the optimisation of regulation of inter-budgetary relations, providing control milestones of this optimisation and allowing for successful implementation of the presidential initiative of growth and development of the Kyrgyz economy. Therein lies the practical significance of the author’s model. The practical implementation of the prepared recommendations in Kyrgyzstan’s financial economy will allow raising the sustainability of the country’s financial system through the strengthening of the official international exchange rate of the national currency, deflation of GDP %, growth of the inflow of foreign direct investments in the economy, and reduction of the share of unsecured bank loans.

Keywords: Sustainable development, Financial economy, Inter-budgetary relations, Optimisation, Foreign direct investments.

Recieved: 22.01.2025 Revised: 27.02.2025 Accepted: 28.04.2025