The National Bank of the Kyrgyz Republic serves as the central bank of Kyrgyzstan.

Kyrgyzstan was the ninth poorest country in the former Soviet Union, and is today the second poorest country in Central Asia after Tajikistan. 22.4% of the country’s population lives below the poverty line.

Despite the backing of major Western lenders, including the International Monetary Fund (IMF), the World Bank and the Asian Development Bank, Kyrgyzstan has had economic difficulties following independence. Initially, these were a result of the breakup of the Soviet trade bloc and resulting loss of markets, which impeded the republic’s transition to a demand economy.

The government has reduced expenditures, ended most price subsidies and introduced a value-added tax. Overall, the government appears committed to the transition to a market economy. Through economic stabilization and reform, the government seeks to establish a pattern of long-term consistent growth. Reforms led to Kyrgyzstan’s accession to the World Trade Organization (WTO) on 20 December 1998.

The Kyrgyz economy was severely affected by the collapse of the Soviet Union and the resulting loss of its vast market. In 1990, some 98% of Kyrgyz exports went to other parts of the Soviet Union. Thus, the nation’s economic performance in the early 1990s was worse than any other former Soviet republic except war-torn Armenia, Azerbaijan and Tajikistan, as factories and state farms collapsed with the disappearance of their traditional markets in the former Soviet Union. While economic performance has improved considerably in the last few years, and particularly since 1998, difficulties remain in securing adequate fiscal revenues and providing an adequate social safety net. Remittances of around 800,000 Kyrgyz migrants working in Russia represent 40% of Kyrgyzstan’s GDP.

Agriculture is an important sector of the economy in Kyrgyzstan (see agriculture in Kyrgyzstan). By the early 1990s, the private agricultural sector provided between one-third and one-half of some harvests. In 2002, agriculture accounted for 35.6% of GDP and about half of employment. Kyrgyzstan’s terrain is mountainous, which accommodates livestock raising, the largest agricultural activity, so the resulting wool, meat and dairy products are major commodities. Main crops include wheat, sugar beets, potatoes, cotton, tobacco, vegetables, and fruit. As the prices of imported agrichemicals and petroleum are so high, much farming is being done by hand and by horse, as it was generations ago. Agricultural processing is a key component of the industrial economy as well as one of the most attractive sectors for foreign investment.

Kyrgyzstan is rich in mineral resources but has negligible petroleum and natural gas reserves; it imports petroleum and gas. Among its mineral reserves are substantial deposits of coal, gold, uranium, antimony, and other valuable metals. Metallurgy is an important industry, and the government hopes to attract foreign investment in this field. The government has actively encouraged foreign involvement in extracting and processing gold from the Kumtor Gold Mine and other regions. The country’s plentiful water resources and mountainous terrain enable it to produce and export large quantities of hydroelectric energy.

The principal exports are nonferrous metals and minerals, woollen goods and other agricultural products, electric energy and certain engineering goods. Imports include petroleum and natural gas, ferrous metals, chemicals, most machinery, wood and paper products, some foods and some construction materials. Its leading trade partners include Germany, Russia, China, Kazakhstan, and Uzbekistan. After Beijing launched the Belt and Road Initiative (BRI) in 2013, China has expanded its economic presence and initiated a number of sizable infrastructure projects in Kyrgyzstan.

In regards to telecommunication infrastructure, Kyrgyz Republic ranks last in Central Asia in the World Economic Forum’s Network Readiness Index (NRI) – an indicator for determining the development level of a country’s information and communication technologies. Kyrgyz Republic ranked number 118 overall in the 2014 NRI ranking, unchanged from 2013 (see Networked Readiness Index).

Kyrgyzstan is ranked 78th among countries for economic freedom by the Heritage Institute.

The COVID-19 pandemic is expected to have a significant negative impact on the Kyrgyz economy that is reliant on services, remittances and natural resources. As a result, in order to mitigate the economic shock and preserve much of the development progress achieved in recent years the World Bank will provide support by financing several projects in the country.