Kyrgyzstan's gross domestic product shrank by 5.6 percent year-on-year in the first half of this year, following a decline in output at the nation's flagship venture with Canada's Centerra Gold, the National Statistics Committee said on Tuesday.
The Central Asian nation's GDP expanded by 4.9 percent in the same period of 2011.
Last year, Centerra's Kumtor gold mine alone accounted for about 12 percent of Kyrgyzstan's GDP and more than half of all its exports, official data show.
Ice movement in the high-altitude pit, which lies about 4,000 metres above sea level, forced the government last month to slash its GDP growth forecast for this year to 1.8 percent from original 7.5 percent.
Kyrgyzstan, an impoverished nation of 5.5 million, is a neighbour of China and hosts Russian and U.S. military air bases. Violent revolts have toppled two presidents since 2005. About 500 people were killed in ethnic clashes in June 2010.
Adding to the Canadian investor's woes in Kyrgyzstan, the country's legislature last month passed a resolution ordering a renegotiation of the current contract with Centerra Gold, after a parliamentary commission found that the project had damaged the environment and human health.
Toronto-listed Centerra, in which Kyrgyzstan holds 33 percent and which also mines gold in Mongolia, said the commission's report was without merit and that the scandal had already cost its Kyrgyz partners hundreds of millions of dollars in losses due to a sharp fall in its share price.
Kyrgyzstan's industrial output plunged by 31.6 percent in the first half of 2012, compared to a 14.9-percent rise in the same period of last year, official statistics showed on Tuesday.
Without taking Kumtor's operations into account, Kyrgyzstan's GDP would have actually expanded by 3.9 percent and industrial output would have risen by 8.2 percent in the first half of this year, the National Statistics Committee said.
In March Centerra forecast output of 390,000-410,000 ounces this year, down from a previous estimate of 575,000-625,000. Kumtor accounted for more than 90 percent of the company's gold production last year.