Kyrgyzstan has yet to convincingly rein in opaque trade flows

CAUCASUS / CENTRAL ASIA - In Brief 26 Jun 2026 by Ivan Tchakarov

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I must admit that I have a soft spot for Kyrgyzstan's BoP data. It is probably the most exciting set of external flows from an analytical perspective in my CCA region and a treasury trove for drawing conclusions about Bishkek's efforts to clamp down on opaque trade with Russia. The analysis is, of course, not only academic as it has a direct bearing on Kyrgyzstan's exposure to sanctions. More intense Western scrutiny of the large 2022-23 CA deficits and E&O surpluses started raising red flags regarding potential sanctions circumvention and, ultimately, led to imposition of geopolitical restrictions on the country. I have hypothesized this link (between large E&O and sanctions) before, but the release of the full 2025 BoP data this week (with a very significant delay) gives me an excuse to re-evaluate the conjecture.As is now well understood, Kyrgyzstan's CA deficits soared in 2022/2023 due to the large re-orientation of trade following the Russia-Ukraine conflict (Graph 1). CA gaps are, however, severely overstated due to large unrecorded trade with Russia (accounted for statistically in the bloated E&O item in the financial account of the BoP). In turn, this reflects significant unrecorded (and undocumented) re-exports to Russia, which are not captured in trade statistics because trade within the Eurasian Customs Union is not subject to customs declaration. Graph 1CA deficits narrowed over 2024/2025, but not enoughSource: Central Bank of Kyrgyzstan, Author's calculationsI have previously sought to look for a glass half-full by claiming progress in reducing E&O, including because of policy efforts to better account for trade flows and cut on illegal (undocumented trade...