BISHKEK, Kyrgyzstan, July 15. Kyrgyzstan's inflation in May 2025 rose to 8 percent, exceeding the upper threshold of the National Bank's target corridor, against the background of high budget indicators characterized by a record budget surplus.
The data obtained by Trend from the Eurasian Fund for Stabilization and Development (EFSD) shows that the sharp rise in consumer prices followed months of gradual acceleration, from 3.8 percent in August 2024 to 6.9 percent in March and 7.1 percent in April, primarily driven by food inflation, particularly in the vegetable segment. The EFSD attributes the May spike to a 23.8 percent hike in electricity tariffs for most consumers starting from May 1.
Despite this inflationary pressure, the fiscal position of Kyrgyzstan significantly improved. The republican budget posted a record surplus of 14.0 percent of GDP in Q1 2025, largely due to the National Bank's profit transfer of $522.60 million (approximately 13.9 percent of GDP) to the state budget in February.
Even excluding this one-off factor, the budget remains in solid shape, with a primary surplus of 3.2 percent of GDP, up from 2.2 percent a year earlier. Tax revenues rose to 26.1 percent of GDP, supported by both external drivers, including high gold prices, and sustained domestic demand. Meanwhile, budget expenditures slightly declined to 27.6 percent of GDP, after excluding transfers to the Stabilization Fund.
The EFSD notes that the robust budget execution provides Kyrgyzstan with fiscal space for continued investment and social spending, although medium-term sustainability will depend on maintaining revenue momentum beyond 2025, when large non-tax inflows are not expected to recur.
