In Kyrgyzstan, there is a threatening expansion of the shadow economy, which is growing faster than the legitimate business sector. By the end of 2024, the volume of the "shadow" segment reached 308 billion soms, accounting for almost 20% of the country's total GDP. According to the latest data from the National Statistical Committee, a significant portion of hidden turnover is associated with informal activities, whose share in the economy has increased to 15.7% over the year.
Statistical data shows a mixed dynamic within the shadow sector. Despite a slight decrease in the share of the hidden economy, the volume of informal activity, on the contrary, has increased. Interestingly, the growth of the unaccounted segment is outpacing the overall economic indicators of the republic. While the official GDP of the country grew by 11.5% last year, the shadow sector demonstrated a growth rate of 12.9%. This indicates that a significant portion of added value in the country continues to remain outside tax control.
The most severe situation is observed in the services sector, where the gray business accounts for almost 70% of all operations in the industry. High risks are similarly present in trade, transport maintenance, the hotel and restaurant business, as well as in the transportation sector. Shadow schemes remain relevant even in capital-intensive industries: in construction and manufacturing, the share of unaccounted activity is 20–22%.
The imbalance in economic development indicates the presence of serious structural obstacles to conducting legitimate business. Many entrepreneurs choose to operate outside the legal framework, seeking to reduce tax burdens and avoid administrative pressure. The growing shadow sector not only reduces government budget revenues but also creates conditions for unfair competition. In the long term, this limits the financial capabilities of the state in implementing social programs and large infrastructure projects.
