The risk of overall public debt distress remains at moderate on account of the rapid accumulation of domestic debt. While there is no breach of the external debt thresholds under any standard shock, by applying a customized stress test on exports reflecting the recent discontinuation of gold exports the rapid rise in transit trade, and considering the heightened global uncertainty, staffs judge external public debt to be sustainable and at moderate risk of debt distress. The present value (PV) of total public debt-to-gross domestic product (GDP) does not breach its threshold under the baseline scenario before 2032, but it does under a standard stress test, thus warranting a moderate rating for the overall risk of debt distress. The Kyrgyz Republic’s current debt-carrying capacity is assessed as strong, but fiscal space to absorb shocks is narrowing after the substantial public wage increase in 2022. Without fiscal consolidation public debt will continue to rise in the longer term. Improving tax collections, reducing the wage bill and energy subsidies, strengthening debt management, avoiding non-concessional borrowing and improving public investment management will be important to reduce fiscal imbalances and containing debt vulnerabilities.