Kyrgyzstan entered prolonged period of high public debt repayments

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Kyrgyzstan entered a stage of peak payments on its external public debt in 2023. It has now been revealed that this period of high payments will last for nine years, until 2032. Experts are questioning whether the country is ready for such payments or if the government will need to tighten its belt, Akchabar wonders.

In 2023, Kyrgyzstan paid 31.56 billion soms (over $496 million) on its external debt. The increase in payments is due to Kyrgyzstan starting to repay the principal on bilateral loans. Previously, as all loans were issued on concessional terms, Kyrgyzstan mainly paid only interest.

From 2019 to 2023, external debt payments increased by 125.55%.

Interestingly, the Ministry of Finance and the country's authorities had previously mentioned different timelines. Specifically, President Sadyr Japarov had published a debt repayment schedule on his Facebook page, according to which the peak period was supposed to end in 2026.

Despite the increase in external debt payments, independent expert Bakyt Satybekov stated that Kyrgyzstan has enough resources for uninterrupted payments, Akchabar reports.

"Overall, all the payments that the republic will make in the near future are planned. And according to the IMF, our public debt remains sustainable and is at moderate risk of a debt crisis for both external and total public debt," the expert asserts.

Moreover, the main indicator for assessing a country's solvency is the debt-to-GDP ratio, and IMF specialists expect it to decrease by 4 percentage points from 45.53% in 2023.

At the beginning of 2024, Kyrgyzstan's external debt amounted to $4.627 billion. Of this, Kyrgyzstan owes $1.795 billion to the China Eximbank. The total public debt of Kyrgyzstan was $6.270 billion.

June 17, 2024