According to the Eurasian Fund for Stabilization and Development report, the key factors keeping inflation at an elevated level are rising electricity tariffs, increasing fuel and lubricant costs, and high domestic demand.

StoriesEconomic risks and inflation forecasts for KyrgyzstanSlides: 6
  1. Economic risks and inflation forecasts for Kyrgyzstan
  2. Main inflation drivers: Rising electricity tariffs; Increasing fuel and lubricant costs; High domestic demand
  3. 11.6 % — expected average inflation by the end of 2026
  4. 42.2 % — increase in commercial banks' loan portfolios
  5. Budget deficit. Large-scale capital expenditures and state enterprise recapitalization are driving the deficit to 3.2 percent of GDP in 2026.
  6. Monetary policy. The National Bank maintains a 12 percent policy rate to combat excess liquidity and reduce loan attractiveness.

Inflation and banking sector forecasts

EFSB analysts expect average inflation to reach 11.6 percent by the end of 2026. A return to the target range set by the National Bank of the Kyrgyz Republic (5–7 percent) is only possible in 2028–2029 amid tightening monetary conditions.

Expected inflation indicators

11.6%2026 inflation forecast
12.2%inflation for 9 months of 2026
11.1%2026 inflation forecast
8.7%2027 inflation forecast

The banking sector is seeing growth in the loan portfolios of commercial banks, which increased by 42.2 percent as of the end of August 2026. Meanwhile, the share of non-performing loans reached 11.3 percent, the highest level since 2024.

Budget deficit and government spending

Large-scale capital expenditures and the recapitalization of state-owned enterprises are leading to a persistent republican budget deficit. According to EFSB estimates, the deficit will be 3.2 percent of GDP in 2026.