A small nation squeezed between China and Kazakhstan is positioning itself to be central Asia’s new tiger economy as it capitalizes on a boom in re-exports, remittances and tourism to attract vital foreign investment.
Kyrgyzstan expects its economy to expand by more than 10% this year after posting real gross domestic product growth of at least 9% annually over the past three years, according to the central bank. A boom in tourism, construction, rising domestic consumption and the re-export of goods from China to neighboring countries are among the main drivers, Governor Melis Turgunbaev said.
The International Monetary Fund sees medium-term growth moderating to more than 5% annually over the next five years in Kyrgyzstan, which borders China as well as the former Soviet stable-mates of Kazakhstan, Uzbekistan and Tajikistan. Its among neighboring economies that got a boost after Russia sent troops into Ukraine in 2022, by acting as intermediaries in imports, exports and payments as trade flows were redirected in response to sanctions.
“The region’s trade structure has changed significantly amid the geopolitical events of recent years,” Turgunbaev said in an interview in Bishkek on Dec. 9. “The country has become more actively integrated into regional and global trade.”
Kyrgyz GDP Accelerates
The nation benefits from boom in re-exports, remittances, construction growth Large infrastructure projects, such as the construction of a China–Kyrgyzstan–Uzbekistan railroad and the Kambarata-1 hydropower plant on the Naryn River that are jointly estimated at $10 billion, also support the economy and attract foreign investment, Turgunbaev said. The rail link will significantly expand Kyrgyzstan’s logistics potential, while the power station will allow the country to become a net exporter of electricity, he said.
The nation of 7.3 million people raised $700 million with its first eurobond sale this year, joining a growing list of central Asian countries courting global investors.
