consumer activity - The Times Of Central Asia

Viewing results 1 - 6 of 10

Economy

Kyrgyz Citizens Are Spending More and Saving Less

The financial habits of Kyrgyz citizens has changed significantly in recent years: people are spending more and saving less. This conclusion was reached by the country's National Statistical Committee. According to the agency, the share of household savings has more than halved, from 24.3% of income in 2020 to 10.8% in 2024. Until 2021, however, Kyrgyz citizens had shown a tendency to save. This contributed to the growth of banks’ deposit bases, and the authorities noted increasing confidence in the financial sector. Formally, this confidence remains, but household behavior has changed. In 2024, the country’s gross disposable income amounted to approximately $20.5 billion, of which roughly $18.2 billion was directed towards consumption. A significant share of economic activity is therefore effectively geared towards meeting current domestic demand. This trend coincides with a period of strong economic growth that the authorities have described as a “leopard’s leap.” In recent years, GDP growth has reached about 10% annually. Economists say domestic demand remains the key driver of growth. The construction sector is expanding, mortgage lending is increasing, and infrastructure projects and gold mining continue to develop. Another indicator of changing behavior is the rise in household consumer spending. Its share increased from 75.4% of GDP in 2020 to 86.9% in 2024. At the same time, statistics show so-called negative savings, meaning that the population is spending more than it officially earns. In practice, this reflects the active use of loans and other external sources of financing. The banking sector and the State Mortgage Company (SMC) play a key role in this process, supporting consumption and thereby stimulating economic growth. Despite continued economic expansion, according to official data, GDP increased by 8% in January-February 2026, analysts warn of potential risks. The decline in savings means households have fewer resources to build a financial “safety cushion.” With incomes largely directed towards current consumption, their resilience to economic shocks is weakening.

Domestic trade

Kazakhstan’s Domestic Trade Growth Slows as Consumer Demand Weakens

The growth of domestic trade in Kazakhstan slowed markedly in early 2026, reinforcing signs of weakening consumer activity and increased business caution. According to the National Statistics Bureau, the trade sector expanded by only 3.4% in January–February, compared with 6% during the same period a year earlier. Growth slowed significantly, affecting both wholesale and retail trade. Analysts at Halyk Finance believe the trend reflects deeper economic processes rather than a short-term fluctuation. “The dynamics at the start of the year point to a cooling of aggregate demand and economic activity,” Halyk Finance said. Wholesale trade, a key indicator of business activity, showed the most pronounced slowdown. Growth fell to 3.8%, down from 6.6% a year earlier. In the first two months of the year, the volume of wholesale transactions reached $9.6 billion. However, the structure of trade indicates a predominance of non-food and industrial goods, reflecting weaker corporate demand. Experts also note that declining oil production has exerted additional pressure on the sector, directly affecting wholesale sales volumes. The situation in retail trade remains mixed. Overall growth stood at 2.6%, driven largely by large retail chains. Sales in organized retail increased by 3.7%, while turnover among individual entrepreneurs and traditional markets continued to decline, falling by 1%. This trend reflects ongoing structural changes in the sector. The market is gradually shifting in favor of large retail players, while small businesses face growing competitive pressure. Changes in consumer spending patterns are also evident. Sales of food products rose by 9.1%, whereas non-food sales increased by only 0.2%, despite accounting for the majority of retail turnover. This suggests that households are becoming more cautious, focusing spending on essential goods and postponing purchases of more expensive items. Another indicator of weakening demand is the rise in inventory levels. As of early March, inventories totaled approximately $2.5 billion, equivalent to around 77 days of sales. Combined with slower turnover, this points to a softening of consumer demand. Overall, analysts note that domestic trade continues to grow, but the pace of expansion is slowing and becoming less sustainable. Business activity remains subdued, consumers are saving more, and the market is gradually shifting toward more formal retail participants. The Times of Central Asia previously reported that the government is considering support measures for key sectors, including dairy and baking, in an effort to curb inflation and sustain demand.

Finance

Over 62% of All Microloans in Kyrgyzstan Are for Consumer Purposes

Between January and September 2025, microcredit organizations in Kyrgyzstan issued loans totaling approximately $720 million to nearly 797,000 recipients, according to the National Statistics Committee. These figures highlight the growing role of microfinance in a country with a population of just over 7 million. While the number of borrowers declined by 13.2% compared to the same period in 2024, the total volume of microloans increased by 33.6%, suggesting a trend toward larger individual loan sizes. Bishkek, the capital, accounted for the largest share of microloan recipients, with nearly 259,000 people, 32.5% of the nationwide total, taking out loans during the nine-month period. Consumer lending dominated the sector, making up more than 62% of all microloans issued. Loans for agricultural development comprised just over 15%, while those for trade and the catering sector represented 9.5%. Compared to the same period last year, the share of consumer loans rose by 9.7%, while the share of agricultural loans declined by 4.6%, reflecting a shift in borrowing priorities. Kyrgyzstan currently has 21 commercial banks and 515 non-bank financial institutions, including microcredit organizations. The financial sector’s client base grew by 40% in the first nine months of 2025, largely due to increased adoption of mobile banking and the rise of online lending through microfinance platforms. In response to growing concerns about digital financial fraud, Kyrgyzstan introduced a self-restriction mechanism on November 1. The system allows individuals to voluntarily block new loans or credit being issued in their name, an effort to protect consumers from unauthorized lending using forged or stolen identification documents. Under the new regulation, banks and microfinance institutions are legally required to verify whether a client has enacted a self-restriction before issuing a loan.

Banking

Kyrgyz Lending Surges 55% as Consumer Demand Fuels Growth

From January to May 2025, the volume of new loans issued by commercial banks in Kyrgyzstan rose by 55 percent, according to the Eurasian Development Bank’s (EDB) June macroeconomic forecast. The sharpest increase was recorded in consumer lending, which more than doubled during the period, rising by 2.1 times. As a result, the total loan portfolio of the Kyrgyz banking sector grew by nearly one-third. “High lending rates are supporting domestic demand: retail trade and public catering increased by 25.3 percent during the first five months of the year. Consumer activity will continue to drive economic growth,” the EDB report states. Similar findings were previously released by the National Bank of the Kyrgyz Republic (NBKR), though with some differences in specific figures. According to the NBKR, net profits of Kyrgyz banks from January to May totaled 12 billion som (approximately 137 million USD). The overall loan portfolio reached 404 billion som (around 4.6 billion USD), with overdue loans amounting to 7.3 billion som (83.5 million USD), or 1.8 percent of the total. The deposit base also showed strong growth: citizens deposited roughly 700 billion som (8 billion USD), reflecting a 17.7 percent increase since the start of the year. Efforts to reduce dollarization have also shown progress. The share of foreign currency assets in banks’ loan portfolios fell by 1.5 percentage points to 18.5 percent. Meanwhile, the proportion of household deposits held in foreign currency declined by 4.6 percentage points to 38.4 percent. According to EDB analysts, several key factors are driving Kyrgyzstan’s economic momentum. These include rising global gold prices, strong domestic consumption, and increased investment. Based on these trends, the bank has revised its 2025 GDP growth forecast for Kyrgyzstan upward by 1.6 percentage points. The country’s economy is now projected to grow by 10.3 percent this year.