Kyrgyzstan’s economy is showing signs of overheating, according to local reports.

Top officials digested the unwelcome news at a crunch meeting, 24KG reported on July 31.

Concerns were aired at a joint meeting attended by the economy and commerce ministry, labour, social security and migration ministry, central bank, national statistical committee, the social fund and anti-monopoly regulator.

The country, focused on developing internal economic drivers, is demonstrating “phenomenal GDP growth”, which hit 11.7% in the first half of 2025, the meeting heard. Strong dynamics are reported across all sectors of the economy. However, meeting attendees reportedly heard, the priority now is not just achieving GDP growth in quantitative terms, but delivering the right kind, or quality, of GDP expansion. In other words, the race is on to construct an economy that can create productive jobs, form a sustainable middle class and lower vulnerabilities faced by the population.

The country’s previous economic model was based on external factors such as remittances from migrants working abroad and gold exports. The country’s Japarov administration, which took power in late 2020, decided that while that model ensured short-term stability, it left the economy exposed to shocks and hindered domestic development.

However, amid the switch to the focus on internal economic drivers, worrying signs have developed behind the impressive growth figures. There are accumulating indications of overheating and structural imbalances.

Experts have pointed out that actual growth rates are exceeding potential levels. That could lead to instability ahead.

An imbalance between income growth and labour productivity, with a significant gap between average and median wages, is observed.

Annual inflation that climbed to an official 7.3% in the first half of the year, with food product prices the main cause, is taken as a sharp warning of the evident overheating.

Consumer price distortions, workforce shortages and an excessive expansion in consumer lending are other warning signs, as is additional state budget spending that is a factor in accumulating imbalances.

External trade, meanwhile, is down. Exports in the first half declined by 27.2% and imports by 11.7%. This has raised pressure on the FX market, with risks for the stability of the country’s balance of payments.