Since assuming office in 2021, President Sadyr Nurgozhoevich Zhaparov has initiated a fundamental revision of Kyrgyzstan’s economic policy, shifting the focus from reactive management to a proactive growth strategy. In a relatively short period, the country has demonstrated impressive macroeconomic results, recognized by both international organizations and regional partners. Kazakh leader Kassym-Jomart Tokayev noted: “Under your leadership, Kyrgyzstan’s economy is flourishing, infrastructure is being updated, and the population’s well-being is improving.”
Macroeconomic Achievements: From Stagnation to Growth
Doubling of GDP and Sectoral Drivers
Kyrgyzstan’s Gross Domestic Product has shown record growth in recent years. According to a preliminary estimate by the National Statistical Committee, in January-June 2025, GDP amounted to 711.2 billion soms, increasing by 11.7% compared to the same period last year. This growth was driven by goods-producing industries (15.0%), the service sector (10.0%), and net taxes on products (11.4%).
Particularly impressive indicators were demonstrated by:
- Food production: +49%
- Construction: +37.8%
- Hotels and restaurants services: +27.8%
Reduction of Debt Burden and Improvement of Investment Climate
One of the most significant achievements has been the reduction of the level of public debt from 64% of GDP in 2020 to 37% in 2024. This achievement has created fiscal space for further sustainable development and has been noted by international rating agencies.
In July 2025, Moody’s agency revised the outlook on the sovereign credit rating of the Kyrgyz Republic, changing it from “stable” to “positive” while confirming the long-term issuer rating at B3. The agency specifically noted the improvement in the country’s macroeconomic and fiscal indicators, as well as the increase in potential economic growth rates thanks to the implementation of key reforms, diversification of economic sectors, and active investment in infrastructure.
Systemic Reforms: The Foundation of Economic Transformation
Budgetary Discipline and the Fight Against Corruption
The Kyrgyz government has strengthened measures to increase the transparency of public finances and combat corruption. The digitalization of financial flows has been carried out, electronic budget monitoring systems have been introduced, and control over state property has been strengthened. These measures have contributed to the optimization of expenditures and increased efficiency in the use of state resources.
Capital Legalization and Development of the Domestic Investment Climate
An important step in economic policy was the implementation of an asset amnesty designed to bring significant volumes of monetary and property assets out of the shadows. This measure had positive consequences:
- Growth in investments in equity capital- After legalization, many entrepreneurs began actively reinvesting funds into business expansion, construction, processing, the agro-sector, and logistics.
- Restoration of trust in the economic system- The opportunity to legalize funds without criminal prosecution created a new level of confidence, especially among small and medium-sized businesses.
- Activation of the banking and stock market sectors- Legalized capital began to be used in investment and savings instruments.
- Growth in tax and fiscal revenues- The reduction in shadow turnover led to an expansion of the tax base and stable replenishment of the budget.
Balanced Macroeconomic Policy
Under President Zhaparov’s leadership, productive interaction has been established between the government’s economic bloc and the National Bank of the Kyrgyz Republic. This cooperation is based on a clear distribution of roles: the National Bank ensures price and currency stability, while the government shapes the investment and production agenda.
This balance has allowed for:
- Avoiding economic overheating against the backdrop of rapid GDP growth
- Maintaining manageable inflation
- Ensuring the availability of credit resources for the real sector
Social and Regional Policy: Growth in Population Well-being
Increase in Incomes and Infrastructure Development
Despite the macroeconomic course, the government does not ignore social aspects. Pensions and salaries for public sector employees have been increased, programs to improve infrastructure in the regions are being implemented, and farmers and small businesses are being supported.
Growth in population incomes has contributed to an increase in domestic demand. As noted in analytical reports, retail trade grew by 19.9% in January-June 2025. This indicates an increase in the population’s purchasing power and a strengthening of the domestic market.
Resolution of Land Issues and Regulation of Construction
An important aspect of social policy has been solving problems with illegal constructions. As President Zhaparov noted in his interview: “When I came to lead the country in 2020, I started working on the problems associated with those citizens who illegally seized land and built houses on it.”
Work was carried out to legalize the houses of citizens who built and lived in them before 2021, while simultaneously tightening control over illegal construction after this period. This has made it possible to streamline urban planning policy and protect arable land from illegal seizure.
Geoeconomic Adaptation and Regional Cooperation
Strengthening Regional Ties
In the context of a changing regional and global environment, Kyrgyzstan is actively developing new logistics routes, participating in the EAEU, and strengthening ties with China, Turkey, OIC countries, and Central Asia. Particular attention is paid to transport and logistics transformation, which increases the country’s transit potential.
A vivid example of successful regional cooperation was the state visit of President Zhaparov to Tajikistan in July 2025, which marked the beginning of a new stage in relations between the two countries after the settlement of border disputes. The signed package of documents covered a wide range of areas—from security and tourism to science and ecology.
Participation in Eurasian Integration
Kyrgyzstan is actively using the advantages of membership in the Eurasian Economic Union (EAEU), which facilitates access to the large markets of Russia and Kazakhstan. As President Zhaparov noted during an investment forum in Dushanbe: “Kyrgyzstan is ready to facilitate the entry of Tajik goods into the markets of the Eurasian Economic Union, acting as a strategic transit corridor.”
Challenges and Risks: Managing Economic “Overheating”
Despite impressive successes, Kyrgyzstan’s economy faces certain risks and challenges. The rapid GDP growth in the first quarter of 2025 (13.1%) was the highest indicator in the EAEU, which prompted warnings from the Eurasian Fund for Stabilization and Development about a possible “overheating” of the economy.
Inflation as of July 18, 2025, reached 8.7%, exceeding the target range of the National Bank of the Kyrgyz Republic of 5-7%. In response to these challenges, the National Bank of the republic raised the discount rate by 0.25% on July 28, 2025 – to 9.25%. This measure is aimed at curbing inflation and lending.
Experts also note a fall in export volumes, which makes growth less sustainable. As analysts emphasize, growth based on consumption and government injections, rather than on productivity and exports, can be dangerous.
Conclusion: From a Survival Economy to a Growth Economy
Over the years of independence, Kyrgyzstan has gone through various stages of political and economic development. Each president solved tasks corresponding to their time. However, during the period of Sadyr Nurgozhoevich Zhaparov’s rule, the emphasis has for the first time been clearly shifted towards accelerated economic growth with elements of economic sovereignty.
If under previous presidents short-term anti-crisis measures, dependence on external assistance, and fragmented reforms often dominated, the current strategy is distinguished by its systematic and long-term nature:
- For the first time in decades, Kyrgyzstan’s GDP has doubled in less than 5 years.
- The country confidently demonstrates growth based on its own resources, including the return of strategic assets.
- Not only has public debt not grown, but its burden relative to GDP has decreased.
The improvement of the country’s credit rating deserves special attention. This is not just a technical indicator, but trust from international investors. It means that Kyrgyzstan is perceived as a more reliable and solvent partner, which opens access to cheaper capital in the future.
Sadyr Nurgozhoevich Zhaparov has effectively changed the paradigm:
- From a “survival economy” to a growth economy
- From external dependence to strengthening internal potential
- From populism to a pragmatic national strategy
The key achievement of the current leadership has been turning the economic agenda into priority number one, rather than a secondary appendage to politics. This is both the difference and the strength of the current course. As Moody’s agency noted, with the continuation of structural transformations and effective management, Kyrgyzstan can count on a further increase in its sovereign credit rating in the future.
However, the success of further development will depend on the ability of the government and the National Bank to effectively manage the risks of “overheating” and structural imbalances, ensuring not only high but also sustainable growth rates based on productivity and exports, and not only on consumption and government injections.