Achievements: tax reforms, construction boom, and economic growth
1. GDP growth rate of over 10 percent
The country's economy showed record results. By the end of November 2025, the real GDP growth was 10.2 percent. The main factors contributing to this growth were construction and the services sector. Kyrgyzstan took leading positions among the EAEU countries in terms of growth rates. It is expected that by the end of the year, growth will remain at around 10 percent.
However, analysts from the Eurasian Fund for Stabilization and Development (EFSD) suggest that after such a sharp rise, Kyrgyzstan's economy should stabilize in 2026, with a projected growth of about 6.4 percent.
2. Construction boom and mortgage support
The construction sector increased by 29 percent, made possible by the state mortgage program (GIK), aimed at mass housing construction in Bishkek and the regions as part of the "My House 2021–2026" project. This also contributed to the growth of related industries, such as cement and finishing materials production.
According to Gulzat Totubaeva, head of the population relations department of the State Mortgage Company, "we started building houses in 2023, and the issuance of the first apartments began only in December 2024." She added that in 2026, around 20,000 apartments are planned to be issued across the country, with more than 4,000 in Bishkek.
3. Tax reform: reinstatement of patents and cash register machines
The tax service completed the mass implementation of cash register machines, which improved business transparency. Authorities also restored the patent system for markets and small businesses, which reduced social tension and helped preserve jobs.
The revenue threshold for trading entities was increased from 30 to 50 million soms, and a single tax rate of 0.25 percent was introduced for the jewelry industry. Tax debts were also written off.
In 2026, the second phase of tax reforms is expected, which is anticipated to lead to the implementation of a new electronic accounting module KEZET. This should reduce the number of tax inspectors by 1,000 if the project is deemed successful.
4. Increase in fixed capital investments
Over 11 months, investments in fixed capital increased by 18.2 percent. The main funds came from domestic investors and budget investments directed towards infrastructure projects and processing.
External investments rose by 17.5 percent, amounting to 283 billion 246.1 million soms.
5. Increase in real wages
Against the backdrop of economic growth, the average monthly nominal salary increased by 19.2 percent. Real incomes of the population, even accounting for inflation, showed positive dynamics, increasing by 12 percent over six months.
The head of the cabinet of ministers, Adylbek Kasymaliev, announced plans to raise salaries from April 1 for social sector workers, such as teachers and medical staff, with a subsequent second phase of a 50 percent increase planned for September 1, 2026.
Implementing the salary increases will require about 57 billion soms per year, of which 39 billion are already accounted for in the 2026 budget.
Problems and challenges: inflation and resource shortages
6. Increase in inflation
In Kyrgyzstan, rising prices became one of the main problems of 2025. By December, inflation reached 8.3 percent, and on an annual basis, it was 9.2 percent. The increase in the prices of essential goods and services negatively affected the purchasing power of citizens, despite the rise in wages.
EFSD analysts predict a decrease in inflation to 6.4 percent in 2026; however, they emphasize that inflationary pressure will remain due to rising electricity tariffs and high food prices. A reduction in inflation is possible with stabilization in external markets and tightening of monetary policy in the country.
7. Increase in the discount rate to 11 percent
To cope with inflationary pressure, the National Bank of the Kyrgyz Republic raised the discount rate to 11 percent on November 25, 2025, up from 9 percent at the beginning of the year. This decision will make loans less accessible, which may slow down economic activity in the future.
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The discount rate is a key tool of monetary policy that determines the cost of short-term borrowing for commercial banks and influences lending conditions for businesses and the population.
8. Decrease in exports and trade imbalance
External trade demonstrated negative results throughout the year. According to data for 10 months, trade volume decreased to $12.8 billion, which is 9.6 percent less compared to the same period in 2024, with exports falling by 38.2 percent.
The existing gap between imports and exports also remains significant: external goods account for 81.2 percent of total foreign trade. This creates pressure on the currency market and increases dependence on remittances from migrants.
9. Growing risk of consumer lending
By the end of September, the volume of consumer loans increased by 60.8 percent, amounting to 159.5 billion soms, which is about 34.6 percent of the total loan volume. The population actively uses loans for purchases and everyday needs. Mortgage loans increased by 30.1 percent, totaling 51 billion soms.
Experts and the National Bank express concern about the high level of household debt, which may lead to repayment risks in the event of a worsening economic situation.
10. Energy resource deficit
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Despite the launch of small hydropower plants, in 2025 Kyrgyzstan again faced a shortage of electricity during peak hours. Electricity imports and power outages for industrial enterprises remain relevant, hindering the development of the manufacturing sector.
It is expected that in 2025, electricity consumption will amount to 18.4–18.5 billion kilowatt-hours, with about 4 billion kilowatt-hours planned to be compensated through imports from neighboring countries.
Additionally, until the end of 2026, a state of emergency in the energy sector remains in effect in the country. President Sadyr Japarov stated that the republic intends to eliminate the electricity deficit and move towards export in the next two to three years.
