Economic Analysis


Population 6.5 million
GDP per capita 1,189 US$
Country risk assessment
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major macro economic indicators

  2019 2020 2021 (e) 2022 (f)
GDP growth (%) 4.6 -8.6 2.0 5.5
Inflation (yearly average, %) 1.1 6.3 11.4 6.0
Budget balance (% GDP)* -0.1 -3.3 -4.0 -4.0
Current account balance (% GDP)* -12.1 4.5 -8.0 -7.0
Public debt (% GDP) 51.6 68.0 67.6 63.1

(e): Estimate (f): Forecast *Including grants


  • Abundant metal resources (gold, copper, uranium, mercury, antimony, lead, iron), whose development represents 30% of GDP
  • Tourism and hydroelectric potential (only 10% exploited)
  • Strategic position and transit corridor between China, Russia and Europe
  • Financial support from multilateral and bilateral donors, as well as from China
  • Member of the Eurasian Economic Union (EAEU)
  • Member of China's Belt and Road Initiative (BRI)


  • Small open economy highly dependent on economic fluctuations in Russia, via remittances (28% of GDP), and in China and Kazakhstan, which account for half of all trade
  • High dependence on gold (45% of exports) and agriculture (20% of GDP, 40% of jobs)
  • Fragile, concentrated and dollarized banking system (43% of deposits and 33% of loans), while credit is expensive, directed and underdeveloped (25% of GDP)
  • Challenging geography (landlocked and 94% mountainous) and significant energy dependence
  • Deficient infrastructure (energy, water, health)
  • Weak governance (corruption, organised crime, heavily politicised judicial system, large informal economy (23% of GDP) that reduces government resources) and difficult business environment
  • Political and social instability linked to weak institutions, poverty (20% of the population), and ethnic, linguistic and economic differences between the northern and southern valleys

Risk assessment

Gold mining disputes threaten activity

The Kyrgyz economy is expected to expand further in 2022, thanks to a gradual recovery in tourism, transportation, and related services. However, health uncertainty and the slow rollout of vaccines could weigh on the economy. Critically, uncertainty remains over the contribution of gold mining to growth in 2022. On 6 May 2021, a Kyrgyz court ordered Centerra Gold, the Canadian firm that owns 100% of Koumtor Gold Company (KGC), to pay approximately USD 3.2 billion for environmental damage caused. The state has also initiated legal proceedings against KGC for unpaid taxes. On 23 October, the government announced that a state-owned company, Kyrgyzgeologiya, would now be responsible for all precious metals mining in the country. These events may sap investor sentiment and dampen growth in the short and longer term, as mining accounts for 10% of GDP, and foreign investment dominates the mining sector. In addition, on 17 September, the London Bullion Market Association (LBMA) temporarily suspended Kyrgyzaltyn, the country's state-owned gold producer, from its list of refiners for failing to meet the requirements of the responsible sourcing programme, thereby cutting off access to the London international gold market. Furthermore, a New York judge approved the suspension by foreign suppliers of deliveries of mining equipment.


The energy sector is also facing difficulties. On 29 September 2021, the state-owned National Energoholding announced plans to restrict the supply of electricity to businesses and streets in the capital city of Bishkek to deal with shortages due to low water levels in the Toktogul reservoir, which produces 40% of the country's electricity. In order to reduce consumption, as part of the 2021-25 electricity pricing policy overhaul, prices have been increased. Starting in 2022, rates will be adjusted based on the previous year's real inflation rate.


Inflation is expected to ease in 2022 to within the 5%-7% target, thanks to cooler domestic demand and tighter monetary policy. The latter follows changes in the Russian monetary policy, with the som moving in line with the rouble due to the importance of remittances from Russia. Nevertheless, high world oil and food prices represent an upside risk to this forecast.Therefore, the government may decide to extend price regulation.


Debt is sustainable thanks to international support and Chinese patience

The budget deficit, which is mainly due to infrastructure financing, is 60% funded by concessional loans and foreign grants. The external and foreign currency-denominated portion of the public debt (82% of the total) is held by multilateral (IMF, ADB, World Bank, EFSD) and bilateral lenders (60%) and by China’s Eximbank (40%). The ratio of public debt to GDP will start to decline in 2022, as activity increases and spending is consolidated. Moreover, on 6 October 2021, the IMF decided to write off USD 12.6 million of the country’s debt under its Catastrophe Containment and Relief Fund (CCRF).


The country runs structurally high trade deficits due to its dependence on imported energy and machinery. In 2022, sales of gold and electricity (even if the former are subject to uncertainty), as well as remittances (28% of GDP), should more than compensate for high hydrocarbon prices. FDI (15% of GDP in 2020) will help finance the deficit, but perhaps less than usual. Foreign exchange reserves (5 months of import coverage in 2021) make it possible to limit som depreciation . A full 70% of the external debt is owed or guaranteed by the state; the private share corresponds in part to the debt contracted by foreign companies present in the country, including Chinese firms in the mining sector.


Sadyr Japarov's government refreshes the political scene

Demonstrations following the disputed parliamentary elections in October 2020, protesting electoral fraud and massive vote buying, led to the resignation of the government and President Sooronbay Jeenbekov. A new president, Sadyr Japarov, was elected in January 2021 with a huge majority, and the following April a constitutional referendum transformed the parliamentary system into a presidential one. A new electoral system combining majority and proportional representation was adopted on 27 August. Parliamentary elections were held early on 28 November 2021, to renew all 90 seats in the Supreme Council. Parties openly supporting Mr Japarov came out on top, while unaffiliated representatives accounted for more than a third of seats. However, people will be ready to take to the streets again to protest political issues and demonstrate against mining operations, which are mostly run by Chinese firms, because of environmental damage (soil, water).


The long-standing border dispute between the Kyrgyz Republic and Tajikistan claimed victims on both sides in 2021 and is set to persist in 2022. Increased militarisation in response to the Taliban takeover in Afghanistan could further exacerbate tensions.


Last updated: February 2022

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