There is more money in the economy in Kyrgyzstan than in Kazakhstan — relative to GDP

Monetisation of the economy is an indicator that reflects how much money in circulation is attributable to a country's economy (the ratio of all cash and non-cash money in accounts to GDP).

A high level of monetisation is usually characteristic of developed financial systems, where businesses and the population actively use banking instruments.

Among the countries of the Eurasian Economic Union, according to data for 2024, Russia consistently demonstrated the highest level of monetisation. During the year, the indicator varied from 55.6% to 58.6%.

Armenia was in second place, with the ratio rising from 34.9% in the first quarter to 40.1% at the end of the year. Kazakhstan and Kyrgyzstan showed similar results. In Kazakhstan, monetisation in 2024 was in the range of 26.6–29%, and in Kyrgyzstan, it was 30–32.1%.

Belarus lagged behind, with the level of monetisation of the economy at around 19–21.9% during the year.

Interestingly, Kyrgyzstan surpassed Kazakhstan in terms of the level of monetisation of the economy, despite the incomparable scale of their GDP. This can be explained by several factors.

• Firstly, with relatively modest amounts of money in circulation, the ratio of money to GDP in Kyrgyzstan is higher.
• Secondly, the country has a well-developed culture of using banking services: deposits and transfers have become a common tool for the population.
• Thirdly, the structure of the Kazakh economy is heavily dependent on exports of oil, gas and uranium. Large transactions in these sectors are carried out through international settlements and currency flows, which are not always reflected in the ‘domestic’ monetary aggregate.
• Finally, Kyrgyz banks attract customers with high deposit rates, which encourages citizens to keep their funds in the banking system.