Kyrgyz Republic

The Kyrgyz Republic is a landlocked, lower middle-income country in Central Asia with abundant natural resources and significant potential to expand its hydroelectricity production, agriculture, and tourism industries. It occupies a strategically located, mountainous territory in the heart of Eurasia, with a rugged topography dominated by the Tien Shan and Pamir ranges that underpins both its hydropower potential and its appeal as an ecotourism destination.

The country has a relatively young and growing population of about 7.4 million people, with a universal literacy rate. The Kyrgyz Republic is also recognized as human capital champion country, based on its notable scores in the World Bank’s new Human Capital Index Plus (HCI+)—among the highest for countries at comparable income levels.

The economy is small but open, with services accounting for the largest contribution to GDP, while agriculture and remittances remain key structural components. The economy has grown rapidly in recent years, averaging 10.22% annually between 2022 and 2025, helping to bring down the poverty rate significantly by both national and international poverty lines. On the one hand, external demand for gold exports from the Kyrgyz Republic—along with domestic demand supported by remittances—and, on the other hand, continued expansion of trade and other service subsectors have fueled the country's recent high economic growth.

However, the economy remains exposed to external factors and commodity price fluctuations, underscoring the importance of structural diversification and resilience building.

The government's National Development Plan, launched in 2025, aims to reach upper-middle-income status by 2030, with a focus on connectivity, agriculture, renewable energy and green tourism—seeking to deepen regional integration, strengthen infrastructure, and better harness the Kyrgyz Republic’s natural resources and geographic advantages to support more inclusive and sustainable growth.

Real GDP expanded by 11.1% in 2025, slightly below the 11.5% recorded in 2024, despite the normalization of re-export trade which had helped boost economic activity and tax revenues since 2022. Growth in 2025 was driven by robust private consumption and investment, estimated to have increased by 17.4% and 15.9%, respectively, in real terms. These gains were underpinned by real wage growth and credit expansion. On the production side, real GDP growth was supported by growth in services (10.9%, in real terms), construction (21.1%) and industry (10.7%).

Average inflation rose to 8.2% in 2025, up from 5% in 2024. The acceleration was driven primarily by higher food prices and adjustments to electricity and heating tariffs. On the fiscal front, the fiscal surplus was 2.6% of GDP, up from 2% in 2024.

Total revenues increased by 4.9 percentage points (pp) to 39.4% of GDP, driven by tax and non-tax revenues. Expenditures grew by 4.3 pp to 36.8% of GDP, reflecting higher spending on goods and services and capital outlays. Public debt rose to 39.5% of GDP as of end-December 2025, up from 36.1% a year earlier following the government’s Eurobonds issuance of $700 million in June 2025.

GDP growth is expected to moderate to 6.1% in 2026, reflecting a slowdown in private consumption and investment from a high base as well as the impact of the conflict in the Middle East. Average inflation is projected to reach 11.7% in 2026, amidst an overheated economy and higher imported energy prices. The fiscal balance is projected to shift to a deficit of 3.5%, as tax revenues are anticipated to decline in line with expected slower economic activity while non-tax receipts are projected to fall from the exceptionally high level recorded a year earlier. Risks to this outlook arise from the impact of geopolitical developments on the economies of Russia and China, which could lead to lower trade and remittances, and to higher prices for fuel and food.

The Kyrgyz Republic has seen strong economic momentum in recent years, which helped reduce poverty and improve livelihoods. Measured at the international poverty line ($4.20/day, 2021 PPP), poverty declined from 16.4% in 2023 to 12.1% in 2024, supported in part by rising labor incomes—average household wages increased by about 36% between 2022 and 2024. Yet the country’s development challenge remains translating growth into more inclusive, private sector–led job creation, including for women and youth: labor force participation is 43% for women compared to 72% for men, and women’s average earnings are about 69% of men’s.

The World Bank Group supports this agenda through a combination of policy engagement and reforms to strengthen the business environment and institutions, investments that raise productivity and connectivity (including in energy, water, agriculture, and digital), and efforts to mobilize private investment. Working as One World Bank Group, IDA is supporting priority reforms and public investments (with an active portfolio of $1.3 billion as of Marh 2026), while IFC and MIGA help catalyze private capital through financing, advisory support, and risk mitigation—together supporting sustainable growth and expanding economic opportunities.

📜 History of the World Bank Group's work in the Kyrgyz Republic.

The World Bank Group is implementing the five-year Country Partnership Framework (CPF) with the Kyrgyz Republic for FY2024–28, with energy, water, and agriculture as priority sectors for financing. The CPF was informed by the World Bank’s extensive analytical work including the Systematic Country Diagnostic Update, discussions with the Cabinet of Ministers of the Kyrgyz Republic, and consultations with stakeholders across the country.

At the midpoint of CPF implementation, the program is broadly on track, with a growing portfolio and continued alignment with national development priorities. Scalable, multi-phase programmatic approaches have enabled the World Bank Group to mobilize co-financing from international financial institutions, strengthen coordination around key investments, sustain deeper sector dialogue, and pursue more ambitious development outcomes.

The most recent Country Opinion Survey shows improved stakeholder perception of the World Bank Group alignment and relevance to the country’s priorities. Digital transformation, sustainable natural resource management, climate change and resilience, and private sector-led growth and job creation received the highest ratings of effectiveness.

For the remainder of the CPF period, World Bank Group engagement will focus on job creation by delivering critical infrastructure, including the Kambarata-1 Hydropower Project, irrigation, and digital programs; supporting enabling reforms through Development Policy Operations and targeted analytical work; and leveraging private capital.

World Bank Group Portfolio

The World Bank’s program in the Kyrgyz Republic currently consists of 24 projects (including 4 regional-level) supporting the modernization and development of various sectors, with total IDA commitments of over $1.3 billion. The IFC portfolio comprises 10 active investment projects with a total committed amount of $69 million (as of March 2026). The focus is on providing local currency loans to banks and microfinance institutions to expand affordable housing finance, improve access to financing for micro-, small- and medium-sized enterprises (MSMEs), particularly women-owned businesses, and support food processing and green projects.