The informal economy comprises up to 50% of the national economy in

Kyrgyzstan, while official estimates vary from 23 to 25% of the GDP. The trade,

construction, transport, and processing industries provide a significant role in

forming informality.

Labour market informality covers 71.8% of all jobs in the country, mostly in the

sphere of microbusinesses and self-employment, while formal employment is

stagnating.

Tax and social security systems make it possible to gain from a lowered tax and

social payments for certain types of microbusinesses and self-employed people

when compared to formal business entities. Distortion of economic operations in

the country creates incentives for high informality in the economy and

consequently in the labour market.