Kyrgyzstan continues to demonstrate one of the highest economic growth rates in the region by the end of 2025. According to the Autumn Regional Economic Outlook of the Eurasian Development Bank (EDB), the country’s real GDP will increase by 9.0%, matching last year’s record, Economist.kg reports.
However, the EDB notes that the main growth drivers are largely short-term, and a gradual slowdown is expected in the coming years.
Impressive Growth Momentum
In 2024–2025, Kyrgyzstan’s economy grew at double-digit rates, driven by an active investment phase in construction and manufacturing, as well as strong consumer demand.
By 2026, growth is projected to slow to 6.4%, and by 2028 — to 5.5%, explained by the “base effect” and a gradual cooling of domestic demand.
According to the EDB, nominal GDP will almost double in four years — from 1,523.2 billion soms ($17.4 billion) to 2,848.6 billion soms ($32.5 billion).
Inflation Remains a Concern
Inflation continues to affect households, with the 2025 year-end rate expected at 8.1%, and the annual average at 7.9%.
Starting from 2026, the EDB forecasts a gradual decline to 6.3%, though consumer price pressure may persist due to fluctuations in food and fuel imports.
Monetary Expansion Slows Down
After rapid money supply and credit growth in 2024 (over 30%), a cooling is observed. In 2025, broad money growth is projected at 26.1%, credit growth at 20.7%, and by 2028 these figures are expected to slow to 7–10%.
This reflects the National Bank of Kyrgyzstan’s shift toward a more cautious policy aimed at stabilizing inflation without stifling economic activity.
Fiscal Surplus Retained
The EDB estimates that Kyrgyzstan’s budget will remain in surplus in 2025 — at +2.1% of GDP.
Revenues and grants will total 27.0% of GDP, while expenditures will reach 24.9%.
From 2026, the surplus is expected to narrow, leading to a small deficit of –0.2% of GDP by 2028.
Experts draw attention to the shrinking tax base — tax revenues are projected to fall from 20.7% of GDP in 2024 to 14.6% by 2028, which could complicate the financing of social and infrastructure programs.
External Sector Still Vulnerable
The current account deficit is gradually narrowing — from –23.5% of GDP in 2024 to –13.8% in 2028.
However, imports still nearly double exports: in 2025, 73.4% of GDP versus 41.7%.
Remittances from migrant workers (about 16.8% of GDP) and foreign direct investment inflows (2.4% of GDP) remain important support factors.
The country’s foreign exchange reserves, covering 5.9 months of imports, are viewed by the EDB as a comfortable buffer.
Structural Reforms Needed
The 9.0% growth rate stems from active lending and large investment projects. But to sustain momentum in the medium term, the EDB recommends deepening structural reforms — expanding the export base, boosting productivity, and improving the efficiency of public investment.
For the transport and industrial sectors, this means shifting from quantitative to efficiency-based growth — cost optimization, digitalization, and the development of logistics and external trade routes.
The EDB assesses Kyrgyzstan’s macroeconomic situation as stable but sensitive to external shocks. Between 2026 and 2028, the economy is expected to continue growing, albeit at a slower pace. According to the EDB, the government should focus on containing inflation, improving tax collection, and ensuring spending quality control.
CentralasianLIGHT.org
November 12, 2025