The Kyrgyz Republic will be increasingly vulnerable to the risk of unrest, possibly violent, over the forecast period. The opposition will continue to mount public protests, but the authorities will deal robustly with dissent. The Economist Intelligence Unit expects the president, Kurmanbek Bakiyev, to benefit from the administrative resources at his disposal to ensure his re-election in the presidential poll to be held in July 2009. Fiscal policy will face challenges over the forecast period, owing to the poor macroeconomic environment. However, financial support from Russia will enable the government to run larger budget deficits than originally planned in 2009-10. We have again revised downwards our forecast for real GDP in 2009, and now expect a contraction of 3%, following growth of 7.6% in 2008. The economy will continue to contract in 2010. Despite further increases in gas import prices, inflationary pressures will abate, owing to lower global prices for food, fuel and other commodities. Despite a downturn in demand for Kyrgyz exports and a fall in remittance inflows, the current-account deficit will narrow as a share of GDP as domestic demand slows.