Moody’s is one of the world’s three largest rating agencies, alongside Standard & Poor’s and Fitch Ratings. The main purpose of such agencies is to assign credit ratings and analyze risks—that is, to assess the financial stability of borrowers (governments, banks, companies) and their ability to meet debt obligations on time. As a result of this assessment, a credit rating expressed in letters is assigned, reflecting the level of creditworthiness: for example, Moody’s highest rating is Aaa, followed by Aa1, Aa2, Aa3, A1, A3, and then B and C categories.

In addition to the rating itself, the agency also publishes an outlook—“stable,” “positive,” or “negative”—which indicates the probability of a rating change in the medium term. For example, a positive outlook signals a high probability of an upgrade if favorable conditions are maintained; a negative outlook signals the likelihood of a downgrade; while a stable outlook means no change is expected.

Moody’s Upgrades the Outlook for the Kyrgyz Republic from “Stable” to “Positive”

On July 11, 2025, the international agency Moody’s revised the sovereign credit rating outlook for the country, upgrading it from “stable” to “positive.” At the same time, the long-term issuer rating was affirmed at B3. In other words, the current rating itself remained unchanged, but the outlook for its future development was improved to positive, indicating that the rating itself could be upgraded in the future if positive trends continue.

“When a major international agency says: ‘You have good prospects,’ this is not just a rating—it is trust. And trust is the key to investments, jobs, and economic growth. It is important for us to maintain this momentum and continue strengthening that trust,” noted Uluk Kydybaev, Head of the Secretariat of the Investment Council under the Cabinet of Ministers.

The revision of the outlook was attributed to significant improvements in the country’s macroeconomic and fiscal indicators, as well as stronger potential growth rates. These results were achieved thanks to the implementation of key reforms, diversification of economic sectors, and active investment in infrastructure projects. As an example of positive shifts, Moody’s cited the reduction of public debt: in 2020, public debt reached 64% of GDP, but by 2024, it had decreased to 37% of GDP. This substantial reduction has created “fiscal space,” providing the country with a cushion needed for sustainable development and resilience to external shocks.

The Secretariat of the Investment Council under the Cabinet of Ministers considers this improved outlook as a result of systematic efforts to improve the investment climate, advance sustainable reforms, and strengthen confidence in the country’s economy among the business community and international partners.

At the same time, Moody’s specified the conditions necessary for any future upgrade of the rating. The agency emphasized the importance of continuing structural reforms, improving the quality of governance, and reducing the economy’s vulnerability to external factors.

What does a “positive” outlook mean and how can it benefit the Kyrgyz Republic?

Simply put:

Moody’s has given the Kyrgyz Republic a “green light,” essentially saying: “You are moving in the right direction.”
This helps the country attract investment, borrow at lower interest rates, and develop its economy. The higher the rating, the greater the trust—and the broader the opportunities.

Below are the key implications and possible benefits of the improved positive outlook:

• High probability of a rating upgrade.
  A positive outlook from a rating agency means there is a strong likelihood that the country’s credit rating will be upgraded over the next 12–18 months (provided the current favorable trends continue). This reflects Moody’s confidence in the Kyrgyz Republic’s economic policy and indicates that there is a real chance to move up from B3 to a higher rating level in the foreseeable future.
• Increased investor confidence and new investments.
  The improved outlook serves as a signal to investors and the international community, indicating that the country’s economic and financial situation is recovering. The government describes this as an important step toward building confidence in international financial markets and opening new opportunities to attract capital and investments into the Kyrgyz Republic’s economy. In other words, foreign partners and lenders will be more inclined to consider projects in the country, contributing to inflows of financing.
• Stronger position in global markets.
  An upgrade of the sovereign credit profile directly influences the country’s image in global markets. It allows the Kyrgyz Republic to present itself more convincingly in negotiations with foreign investors, partners, and financial institutions.
• Better conditions for business and banks.
  A higher sovereign rating also benefits the domestic financial sector. Financial institutions gain opportunities to attract resources on more favorable terms: loan maturities can be extended, and interest rates reduced. Commercial banks, for example, can more easily secure their own ratings from international agencies, giving them access to cheaper and longer-term funding. Ultimately, the improvement of the country’s overall credit status creates a more comfortable environment for business development and investment projects domestically.
• Cheaper sovereign borrowing.
  A sovereign rating directly affects the interest rates at which the government can borrow abroad. A higher rating makes it easier to issue sovereign bonds—such as Eurobonds—and helps reduce borrowing costs. This enables the Kyrgyz Republic to secure external loans on better terms in the future, directing the savings to economic development.

Moody’s decision to upgrade the outlook on the Kyrgyz Republic’s rating to “positive” is an important signal that the country’s economy is progressing.
While such ratings may seem distant from daily life, they have broad effects: investor trust grows, opportunities for financing business projects expand, and the government can reduce debt-servicing costs and attract more investments into key sectors. In the longer term, this lays the foundation for sustainable economic growth and improvements in people’s well-being. However, to translate this outlook into an actual rating upgrade, the country must continue its reforms and maintain macroeconomic stability to meet the positive expectations of international experts.