The EABR has raised its growth forecast for the Kyrgyz economy, but expects higher inflation

The Eurasian Development Bank has revised its forecast for Kyrgyzstan’s economic growth in 2026 upwards from 9.3 per cent to 10.2 per cent. At the same time, its inflation forecast has deteriorated sharply. Instead of 8.3 per cent, the bank now forecasts a 11.5 per cent rise in prices.

The updated figures are set out in the EDB’s macroeconomic forecast, published in June 2026. The bank’s previous forecast, dated 18 December 2025, was used for comparison.

The forecast for Kyrgyzstan’s GDP growth in 2026 has been raised by 0.9 percentage points — from 9.3 per cent to 10.2 per cent. The forecast for 2027 has been revised upwards from 7.6 per cent to 8.3 per cent, whilst the forecast for 2028 remains unchanged at 7.5 per cent.

Furthermore, the estimate for economic growth in 2025 has been revised upwards from 10.3 per cent to 11.1 per cent.

Despite the revision, the EDB still expects a gradual economic slowdown: from 11.1 per cent in 2025 to 10.2 per cent in 2026, 8.3 per cent in 2027 and 7.5 per cent in 2028. In other words, this does not represent an acceleration compared with last year, but rather a more moderate slowdown than the bank had anticipated in December.

According to analysts’ estimates, the economy will be supported by government investment, infrastructure projects, the ‘My Home’ housing programme and investments from the Russian-Kyrgyz Development Fund. The EDB also takes into account the rise in public sector wages, which will support consumer demand.

At the same time, the inflation forecast has been revised significantly upwards. For the end of 2026, the bank now expects 11.5 per cent instead of 8.3 per cent — an increase of 3.2 percentage points. For 2027, the forecast has been raised from 7.4 per cent to 9.2 per cent, and for 2028, from 6.2 per cent to 7 per cent.

The reasons cited include rising global food and oil prices, logistical difficulties due to the conflict in the Middle East, and increases in wages, excise duties and tariffs. According to EDB calculations, the rise in electricity tariffs in May alone could add 0.4–0.6 percentage points to inflation.

Against the backdrop of higher inflation, the bank has also raised its forecast for the average discount rate. In 2026, it is expected to stand at 11.8 per cent, up from the previous forecast of 11 per cent, and in 2027–2028, at 12 per cent instead of 11 per cent.

The forecast for the KGS exchange rate, by contrast, has been revised upwards. In December, the EDB had expected an average exchange rate of 89.2 KGS per dollar in 2026; this has now been revised to 88 KGS.

Thus, the new forecast suggests higher economic growth and a stronger KGS for Kyrgyzstan, but at the same time a longer period of high inflation and tight monetary policy.