BISHKEK, Kyrgyzstan, April 14. The
International Monetary Fund (IMF) has projected that Kyrgyzstan’s
fiscal balance will shift from a surplus of 1.9 percent of GDP in
2024 to a deficit of 3.4 percent of GDP in 2025, Trend.
The IMF expects this deficit to stabilize around 3 percent of
GDP in the medium term.
Tax revenue is anticipated to decline by 1 percent of GDP in
2025 and an additional 0.7 percent by 2030, primarily due to
reduced trade taxes and VAT on imports as trade growth slows.
On the other hand, capital expenditures are expected to rise by
1.6 percent of GDP in 2025, driven by large-scale infrastructure
investments not yet accounted for in the government’s budget.
However, these expenditures should moderate in the medium term.
The IMF praised Kyrgyzstan’s strong fiscal discipline and
advised the authorities to prioritize spending and exercise caution
with external commercial borrowing to ensure long-term fiscal and
debt sustainability. Reducing fiscal deficits, the IMF noted, would
enhance fiscal buffers, improve resilience to economic shocks, and
help alleviate inflation pressures.
To expand its fiscal space, the IMF suggested Kyrgyzstan could
boost revenue by reducing VAT exemptions and special tax regimes,
increasing the progressivity of the Personal Income Tax, enhancing
revenue administration, and directing Kumtor gold mine’s net
profits to the state treasury.
On the expenditure side, the IMF recommended controlling the
public wage bill, reducing energy subsidies, improving the
efficiency of social spending, and strengthening public investment
management.
