Kyrgyzstan

Since January 2016, the Kyrgyz Republic benefits from preferential access to the EU market as a beneficiary of the EU's GSP+ which requires the ratification of 27 core international conventions on human and labour rights, environmental protection, and good governance. Kyrgyzstan is a lower-middle income economy with a per-capita income of $1.440 in 2022. Total EU imports from the Kyrgyz Republic amounted to about €147 million in 2022, however, only about €8 million where imported using GSP+ preferences as most imports benefit from most favoured nation duties. Although the country faces a number of structural challenges, such as a high dependence on remittances and a large informal sector, GDP growth has been very steady over the recent years with an average between 4-5%.

What is the GSP+?

The GSP+ is a special incentive arrangement for Sustainable Development and Good Governance that supports vulnerable developing countries. Next to fulfilling the eligibility requirements of the Standard GSP, GSP+ countries are required to ratify 27 international conventions on human rights, labour rights, environmental protection and climate change, and good governance. In order to ensure effective implementation of the conventions as well as compliance with reporting obligations, the EU engages in monitoring activities with the GSP+ countries. GSP+ beneficiaries can benefit from complete duty suspensions for products across approximately 66% of all EU tariff lines.

Kyrgyzstan flag

At a glance: GSP+ beneficiaries' preferential imports to the EU

group

6,97 M

Population

account_balance
Parliamentary Republic

Government

trending_up

6.30%

GDP Growth

equalizer

8.60%

Inflation

money

$ 11,54 B

GDP

27 -

Freedomhouse index

4 -

ITUC Global Rights Index

35.7 v

Environmental Performance Index

Facts about the Kyrgyz economy

Landlocked Economy

The Kyrgyz Republic is a landlocked economy, interspersed with mountains which set the basis for the country's high potential for hydropower generation. Kyrgyzstan also has a number of natural resources like gold, rare earth metals, coal, oil, and natural gas.

Export Products

The main export products of the Kyrgyz Republic are gold and other precious-metal ores and medium oils. Important agricultural products for export are dried kidney beans and raw cotton.

Trade Partners

A large part of Kyrgyzstan's trade is accounted for by regional trading partners - China, Russia, and Kazakhstan in particular.

Economic Structure

Services (52.4%) contributes the largest share to the Kyrgyz GDP, followed by the industry sector (22.2%), which is dominated by mineral extraction. Other industries include small machinery, textiles, and food processing.

Usage of GSP+ Preferences

Only about 5% of overall EU imports from the Kyrgyz Republic make use of trade preferences granted under the GSP+. This can be explained, however, by the small fraction of only 8.5% of all EU imports eligible for GSP preferences.

Trade with the EU

Total trade with the Kyrgyz Republic amounted to € 1,319 million in 2022. With a share of approximately 5%, the EU only plays a minor role in Kyrgyzstan's total trade.

The Kyrgyz Republic and the EU (2022)

Imports from the Kyrgyz Republic by product section

Imports from Kyrgyz Republic over time (in € m)

THE KYRGYZ REPUBLIC AND THE EU’s GSP

Economic Impact

The Kyrgyz economy can be considered vulnerable and is, with a vulnerability score of 0% noticeably below the threshold of 7.4%. In addition, Kyrgyzstan's economy is mostly concentrated on a small bandwidth of products. The country's diversification percentage stood at 84.8% in 2019 with the minimum diversification threshold standing at 75%.

9%

Only a small fraction of the Kyrgyz Republic’s current exports to the EU are eligible for tariff reductions under the GSP. With only 8.5%, the Kyrgyz Republic is the country with the smallest share of eligible imports under the GSP+.

61%

With 66% the Kyrgyz Republic makes the least use of its preferential market access among all GSP+ countries.

Preference utilisation and export diversification

Kyrgyz imports to the EU

Preference Utilisation vs. total eligible imports

The preference utilisation rate of the Kyrgyz Republic fluctuated considerably over the regarded period, particularly between 2013 and 2017. Since then, the rate has been rather stable with an average of about 62%. The transition of the Kyrgyz Republic to GSP+ status in January 2016 had a notable impact. The preference utilisation rate increased by 7 percentage points between 2016 and 2018. Likewise, total imports from Kyrgyzstan increased ninefold since the transition to €630 million in 2018. However, only a fraction of these were imported under GSP+ reduced duties as most imports already benefited from MFN zero tariffs. The largest product group imported using GSP+ preferences are fruits, nuts, and vegetables (02b). The preference utilisation rate of this section increased by 27% between 2020 and 2022 and currently stands at 81.5%.

The largest product sections under the GSP+

Preferential imports under the GSP remain concentrated on fruit and vegetable imports, which make up 77% of all preferential imports. Between 2018 and 2020 preferential imports of tobacco increased exponentially, and in 2020 it made use of 100% of preferences. Since 2020 the value of imports of tobacco, however, decreased by over 470 thousand euros. and this product is no longer in the top 5 GSP eligible categories. Similarly, the category S15b - copper, nickel, aluminium, lead, zinc, tin and articles thereof - was the second largest product section until 2020, with an utilisation rate of 93%, but despite increased imports, much less is currenlty eligible, (3%), and by 2022 the utilisation rate is at 0%. At the same time, the import of products from the category S09a - wood and articles thereof - represents the second biggest share of imports, of which almost 48% is GSP eligible, but the country has not benefitted from the preferential market access.

SUSTAINABLE DEVELOPMENT AND MONITORING PRIORITIES

The Kyrgyz Republic (Kyrgyzstan) has benefitted from GSP+ since 2016. In this time, the country has gone through several periods of change. Nonetheless, it has maintained steady engagement in GSP+ monitoring. There is untapped potential to maximise the economic benefits of the scheme. The 2020-2022 reporting period was also marked by the effect of the COVID-19 pandemic, significant political flux, and a worrying trend of pressure on civic freedoms and human rights and rule of law, amid large-scale legislative changes.

Monitoring priorities during the reporting period 2024-2025

Civil society space and media freedom

Torture prevention and criminal justice reform

Gender-based violence, violence against children, and discrimination against minorities

Labour rights

Protection from and prevention of child labour and preventing and combating trafficking in persons

Environmental conventions implementation

Anti-Corruption

Drug control strategy

For the reporting period 2024-2025, the EU has focussed its monitoring activities on eight priority areas, primarly on civic freedoms, human rights and rule of law.

EU-Kyrgyz Republic Bilateral Development Assistance

DG INTPA

Access all info about EU-Kyrgyzstan relations on the International Partnerships website: https://international-partnerships.ec.europa.eu/countries/kyrgyzstan_en

Opportunities in Kyrgyzstan

  • Favourable geographic location with good proximity to important regional markets and the Eurasian Economic Union
  • Young population and cost-effective labour supply
  • The government aims at expanding the agri-food sector through improving competitiveness and focussing more strongly on organic production
  • Considerable mineral deposits such as gold and rare earths
  • Large untapped potential in hydropower generation, currently only 10% of the potential has been exploited
  • Part of China's Belt & Road initiative

Contact points