IMF Warns Sharp Wage Increases Also Risk Fueling Inflation in Kyrgyzstan

Kyrgyzstan’s public-sector wage bill has reached about 9.5 percent of gross domestic product, according to an International Monetary Fund report on public-sector employment and pay management. The share exceeds levels in regional countries with comparable economies.

Public-sector employees account for roughly 7.4 percent of the working-age population. Government spending on their wages has ranged from 8 percent to 10.5 percent of GDP in recent years, the report says.

The problem, as described by experts, is not simply the size of the wage bill. Public-sector salaries often remain frozen for several years, then rise sharply. That pattern creates inflation risks and could undermine macroeconomic stability.

The IMF recommends increasing pay for healthcare workers and teachers, while acknowledging that such measures would place additional pressure on the state budget. Experts suggest limiting the growth in spending by reducing administrative staff and applying more moderate increases in public administration.