Economic Studies


Population 6.3 million
GDP per capita 1,293 US$
Country risk assessment
Business Climate
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major macro economic indicators

  2017 2018 2019 (e) 2020 (f)
GDP growth (%) 4.7 3.5 4.0 -4.0
Inflation (yearly average, %) 3.2 1.5 1.5 3.0
Budget balance (% GDP) -4.6 -1.3 -3.0 -3.0
Current account balance (% GDP) -6.2 -8.7 -9.0 -7.5
Public debt (% GDP) 58.8 56.0 56.6 55.0

(e): Estimate. (f): Forecast.


  • Significant gold and other metal resources (copper, uranium, mercury, iron)
  • Hydroelectric potential (uses only 10%)
  • Position as a strategic hub between Asia and Europe
  • Support from bilateral and multilateral donors
  • Part of China’s Belt and Road (B&R) Initiative
  • Member of the Eurasian Economic Union since 2015 (Russia, Belarus, Kazakhstan and Armenia)


  • Poorly diversified economy remains dependent on gold, agriculture and remittances from expatriates
  • Landlocked country with challenging geography and high energy dependency
  • Deficient infrastructure (irrigation, sanitation, electricity)
  • Significant underground economy undermines public resources
  • Underdeveloped banking system (credit = 23% of GDP in 2018)
  • Difficult business environment
  • Political and social instability linked to weak institutions, the high poverty rate and inter-ethnic tensions
  • Difficult relations with neighbours over issues such as water management and borders

Risk assessment

Continued sustained growth

In 2020, growth is expected to remain sustained. After declining in 2018, production at the Kumtor gold mine (9% of GDP in 2018) has recovered and should benefit from further exploration to extend the life of the site. Agriculture (14% of GDP and 27% of jobs) will continue to play a significant role in the economy, of which the main driver will remain private consumption (83% of GDP). Massive remittances from expatriate workers should benefit from a stronger Russian economy. Public investment (about 20% of GDP) will also contribute to economic activity, supported by concessional loans from international organisations, notably the World Bank and the Asian Development Bank (USD 100 million upgrade of the Uch-Kurgan hydroelectric power plant). Construction of the Alternative North South Road (USD 850 million project) by China Road and Bridge Corporation will continue as part of the Chinese Belt and Road (B&R) initiative. Despite a difficult business climate, foreign private investment, which is concentrated in the mining industry, could resume with the end of the dispute between the government and Centerra Gold Inc. over the distribution of profits from the Kumtor mine. Notwithstanding the prospect of an increase in non-gold exports (particularly textiles) to Uzbekistan and solid export performances by gold, foreign trade will still make a negative contribution due to its large deficit. Inflation is expected to be moderate owing to the som’s strong performance against the rouble, the currency in which food (35% of the basket) imports from Russia and Kazakhstan are denominated.


Limited effectiveness of policy and external vulnerability

Budgetary consolidation efforts, which are already moderate, could come to a halt with the year-end elections. In addition, the government’s austerity policy remains hampered by the informal economy, major corruption in the public sector and tax exemptions, which are causing substantial resource losses. Moreover, the public wage bill (10% of GDP) and subsidies for energy prices are a drag on revenues. However, public debt, which is 86% external, could stabilise, with the positive impact of growth and the spread relative to the average interest rate being offset by the deficit. Despite vulnerability to growth and exchange rate fluctuations, default risk looks moderate given the concessional nature of the debt and the absence of major short-term repayments. Almost half of the external component is due to Eximbank China. Monetary policy will remain ineffective. Credit, meanwhile, continues to be underdeveloped. The securities requested are high. The average lending rate is 14% (while the key rate is 4.25%), due to low competition and high costs. However, this difference is misleading because a portion of credit is subsidised. In addition, dollarization remains high, at 38% of credit and 44% of deposits at the end of 2018. The current account deficit could be reduced with a decrease in the trade deficit (36% of GDP in 2018). Gold exports may remain on an upward trend, while exports of agricultural products (cotton, tobacco) and textiles to Uzbekistan will increase as trade links strengthen. The country continues to be dependent on imports of capital goods, as well as food and energy products, but the latter are expected to remain stable. The increase in transfers (30% of GDP) from Russia (98% of total transfers) will largely offset the trade deficit. Concessional project loans and one-off FDI inflows will finance the current deficit. Foreign exchange reserves (four months of imports at the end of 2018) will allow the central bank to continue its interventions on the foreign exchange market to smooth fluctuations and limit the impact on external debt (85% of GDP, including 37% private share at the end of 2018).


Future reforms and improved external relations

Kyrgyzstan is affected by political instability, having gone through two revolutions since independence in 1991. This owes much to the ethnic, linguistic and economic differences between the northern and southern valleys, which are separated by a high mountain range and which constitute the productive parts of the country. Moreover, political parties are more about people than beliefs. In October 2017, former Prime Minister Sooronbay Jeenbekov was elected President for six years with 54.3% of the vote. His predecessor and mentor Almazbek Atambayev was arrested in August 2019 on corruption charges. The Social Democratic Party (SDP) founded by Atambayev has overwhelmingly sided with Jeenbekov, allowing the ruling coalition to remain in power, with the SDP acting as the senior partner in the government led by Prime Minister Abylgaziyev since April 2018. Although the country has a parliamentary system, the Parliament traditionally aligns itself with the President. Within the framework of the National Strategy for Sustainable Development 2040, the government aims to carry out structural reforms to improve the functioning of administrations, customs regulations and competition laws and to fight corruption. The country remains closely linked to Russia, which has a military base near the capital. Relations with Uzbekistan and Kazakhstan have improved considerably, although those with Tajikistan remain difficult. Relations with China develop under the B&R initiative, although the presence of Chinese workers, the lack of transparency in the awarding of contracts and loans, and the treatment of Muslim minorities in Xinjiang are coming in for criticism.


Last update: May 2020

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