IMF Executive Board Concludes 2026 Article IV Consultation with Kyrgyz Republic
IMF News, June 4, 2026
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- Published: June 4, 2026
Overview and recent performance
- The Kyrgyz Republic has sustained strong economic growth for the fourth consecutive year.
- Output is estimated to have grown by 11 percent in 2025.
- Inflation rose to 11 percent in March 2026, well above the central bank’s 5–7 percent target range.
- Since 2022, expanded trade flows, robust remittance and capital inflows, and strong construction activity supported by government spending have underpinned rapid growth.
- The favorable economic performance provides a window of opportunity to enhance resilience, strengthen policy buffers, and support inclusive growth.
Medium-term outlook and risks
- Growth projections:
- Real GDP (growth in percent): 2025: 11.1; 2026: 6.1; 2027: 5.8; 2028: 5.4; 2029: 5.3; 2030: 5.2; 2031: (not listed for 2031 growth).
- Inflation outlook:
- Consumer prices (12-month percent change, eop): 2025: 12.5; 2026: 10.5; 2027: 8.5; 2028: 7.5; 2029: 6.5.
- Consumer prices (12-month percent change, average): 2024: 5.0; 2025: 8.2; 2026: 11.7; 2027: 11.4; 2028: 7.9; 2029: 7.0.
- External position and external risks:
- Strong remittances and high gold prices are expected to support the external position.
- Even with limited exposure to the war in the Middle East, sustained high oil prices could add to inflation pressures.
- Current account balance (in percent of GDP): 2025: -24.4; 2026: -7.3; 2027: -7.0; 2028: -6.2; 2029: -5.7; 2030: -5.4; 2031: -5.3.
- Export of goods and services (in millions of U.S. dollars): 2025: 7,229; 2026: 12,319; 2027: 13,263; 2028: 14,503; 2029: 15,615; 2030: 16,680; 2031: 17,718.
- Import of goods and services (in millions of U.S. dollars): 2025: 15,563; 2026: 17,299; 2027: 18,528; 2028: 19,969; 2029: 21,315; 2030: 22,814; 2031: 24,282.
- Gross International reserves (in millions of U.S. dollars): 2025: 8,698; 2026: 9,246; 2027: 8,904; 2028: 8,826; 2029: 8,636; 2030: 7,654; 2031: 6,926.
- Gross reserves (months of next year imports, eop): 2024: 3.8; 2025: 3.2.
- External public debt outstanding (in percent of GDP): 2025: 26.6; 2026: 27.4; 2027: 28.2; 2028: 24.6; 2029: 22.3.
- Projection summary:
- Growth is expected to moderate as reexport and trade-related activities plateau, but will be buoyed by large infrastructure projects over the medium term.
- Inflation is likely to remain high through 2027 before easing gradually if macroeconomic policies are tightened appropriately.
Fiscal and public debt developments
- After fiscal surpluses in 2023–25, the budget is projected to move into deficit in 2026, mainly because of higher public wages and capital spending.
- General government finances (in percent of GDP):
- Revenue: 2023: 34.5; 2024: 38.5; 2025: 33.4; 2026: 31.4; 2027: 31.2; 2028: 31.1; 2029: 30.8; 2030: 30.6.
- Of which: Tax revenue: 2023: 21.9; 2024: 21.7; 2025: 23.0; 2026: 22.6; 2027: 22.7; 2028: 22.5.
- Expense: 2023: 26.1; 2024: 26.3; 2025: 27.5; 2026: 25.6; 2027: 25.3; 2028: 25.4.
- Gross operating balance: 2023: 8.4; 2024: 8.8; 2025: 12.2; 2026: 6.0; 2027: 5.9.
- Net acquisition of nonfinancial assets: 2025: 9.6; 2026: 9.7; 2027: 9.3; 2028: 9.5; 2029: 8.9; 2030: 8.1.
- Overall balance (net lending/borrowing) 2/: 2023: 1.6; 2024: 2.0; 2025: 2.6; 2026: -3.8; 2027: -3.5; 2028: -3.6; 2029: -3.1; 2030: -2.8.
- Net lending/borrowing excluding CKU railways: 2023: 3.0; 2024: -2.6; 2025: -2.5.
- Primary net lending/ borrowing: 2023: 3.1; 2024: -1.9; 2025: -1.7; 2026: -1.0; 2027: -0.6; 2028: -0.4.
- Total government debt 3/: 2023: 42.0; 2024: 36.2; 2025: 39.4; 2026: 41.4; 2027: 40.6; 2028: 40.5; 2029: 40.4; 2030: 40.8.
- Of which domestic debt: 2023: 10.9; 2024: 11.3; 2025: 15.8; 2026: 14.8; 2027: 13.3; 2028: 12.3; 2029: 16.0; 2030: 18.5.
- Public debt remains sustainable, but financing needs are sizable.
- Directors underscored the need to bolster the fiscal position by strengthening revenue mobilization to create space for priority infrastructure and targeted social spending, while containing expenditure on energy subsidies and wages.
- Directors called for enhancing public financial, investment, and debt management to strengthen efficiency, resilience, and fiscal sustainability.
- Directors emphasized the need to fully capture quasi-fiscal operations and SOE risks, including ensuring that the operations of the Stabilization Fund are transparently reflected in fiscal reporting and risk assessments.
Monetary, financial sector, and reserve issues
- Monetary sector indicators:
- Reserve money (percent change, eop): 2024: 17.5; 2025: 29.7; 2026: 17.2.
- Broad money (percent change, eop): 2024: 31.9; 2025: 43.3; 2026: 36.4; 2027: 19.2.
- Credit to private sector (percent change, eop): 2024: 33.9; 2025: 49.0; 2026: 27.8; 2027: 26.5.
- Credit to private sector (in percent of GDP): 2025: 26.7; 2026: 28.8; 2027: 30.9.
- Velocity of broad money 4/: 2023: 2.4; 2024: 1.8.
- Policy Rate 5/: 2023: 13.0; 2024: 11.0.
- Directors supported maintaining an appropriately tight and data‑dependent monetary policy stance until inflation durably returns to the central bank’s target range.
- They emphasized the importance of strengthening the operational framework and encouraged the authorities to strengthen the independence of the central bank.
- Greater exchange rate flexibility and more diversified reserves would further enhance external resilience.
- Noting rapid credit growth, high NPLs and a deepening bank–sovereign nexus, Directors called for heightened financial supervisory vigilance and capacity, focusing on a risk-based approach and proactive macroprudential measures.
- Directors also noted the need for enhanced AML/CFT measures and stronger supervision and governance of virtual asset service providers.
Structural reforms and inclusivity
- Directors called for ambitious structural reforms to support private sector-led growth.
- Priority areas identified:
- SOE reform and strengthening the business environment.
- Enhancing competition, the rule of law, and anti-corruption.
- Reducing informality and labor market rigidities.
- Investing in human capital and digital infrastructure.
- Harnessing the gains of AI.
- Directors supported ongoing efforts to reduce informality and labor market rigidities, invest in human capital and digital infrastructure, and harness the gains of AI.
- Strengthening external sector and national account statistics is essential to enhance macroeconomic surveillance.
Executive Board assessment and recommendations
- Executive Directors agreed with the thrust of the staff appraisal.
- They welcomed the Kyrgyz Republic’s rapid economic growth and declining poverty, while noting downside risks, emerging signs of overheating, and elevated inflation pressures.
- Key Director recommendations:
- Careful policy recalibration, supported by Fund capacity development, to enhance resilience, strengthen buffers, and foster private sector-led inclusive growth.
- Bolster fiscal position via stronger revenue mobilization and contain expenditure on energy subsidies and wages.
- Enhance public financial, investment, and debt management; fully capture quasi-fiscal operations and SOE risks; ensure transparent reporting for the Stabilization Fund.
- Maintain appropriately tight and data-dependent monetary policy until inflation returns to target; strengthen central bank operational framework and independence.
- Increase exchange rate flexibility and diversify reserves to enhance external resilience.
- Heighten financial supervisory vigilance, adopt a risk-based approach, and implement proactive macroprudential measures.
- Strengthen AML/CFT measures and supervision/governance of virtual asset service providers.
- Undertake ambitious structural reforms to support private sector-led growth and improve statistics for macroeconomic surveillance.
Key social and demographic indicators (Table 1, selected)
- Population (in millions, 2024): 7.3
- Gini coefficient (2023): 0.26
- Unemployment rate (2024): 3.7
- Life expectancy at birth in years (2025): 72.1
- Poverty rate (in percent, national definition, 2024): 25.7
- Adult literacy rate (percent of popul., 2025): 99.6
- Per capita GDP (in million U.S. dollars, World Bank, 2024): 2,420
- Under-five mortality (per 1000 live births, 2025, est.): 12.6
- GDP per capita (in U.S. dollars): 2023: 2,191; 2024: 2,568; 2025: 3,131; 2026: 3,502; 2027: 3,759; 2028: 3,998; 2029: 4,222; 2030: 4,424; 2031: 4,599
International Monetary Fund press release, June 4, 2026.
