The new country strategy for Tajikistan sets out the Bank’s priorities in the country for the period 2020-25 and addresses issues such as a volatile macroeconomic environment, a challenging business climate and vulnerability to climate change factors.
In the strategy period, the EBRD will aim to improve Tajikistan’s infrastructure, its regional connectivity and employment opportunities in the country. Tajikistan has one of the youngest populations of all the economies in which the Bank invests.
The EBRD’s operational and strategic priorities in Tajikistan will be based on the following three pillars:
strengthening the competitiveness of businesses and improving the business environment
fostering regional integration, energy reform and infrastructure connectivity
supporting wider access to better infrastructure and business services for women, young people and underdeveloped regions.
Regional cooperation is key to Tajikistan’s sustainable economic development, for the expansion of trade and for its energy security. Positive economic developments, including better interstate relations and connectivity, will allow the EBRD to support necessary reforms and facilitate the country’s transition to one based on private-sector growth.
The EBRD will be aiming to increase the size and scope of its operations. It will continue financing infrastructure and energy sector projects, as well as providing support for private sector companies.
The EBRD’s latest Tajikistan strategy was adopted on 26 February 2020
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The EBRD in Tajikistan: Results snapshot
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Tajikistan's policy response to the coronavirus crisis
The EBRD is monitoring Tajikistan's policy response to the coronavirus pandemic. Our biweekly publication identifies the major channels of disruption as well as selected impact and response indicators.
Current EBRD forecast for Tajikistan’s Real GDP Growth in 2021 6.5%
Current EBRD forecast for Tajikistan’s Real GDP Growth in 2022 6%
Tajikistan’s real GDP expanded by 7.5 per cent in the first quarter of 2021. Domestic demand started recovering with retail trade turnover growing 9.2 per cent year-on-year, and fixed investment increasing 7.4 per cent year-on-year in the first quarter of 2021. Industrial output grew at a very high rate (18.4 per cent year-on-year in the first four months of 2021) with strong gains in mining (27.1 per cent year-on-year) and manufacturing (20.2 per cent year-on-year).
Exports surged by 86.3 per cent (driven by precious metals), while imports rose by only 6.2 per cent, resulting in the trade balance deficit narrowing to US$ 132.3 million in January-April 2021 from US$ 520 million a year ago. Strong growth in remittances in the fourth quarter of 2020 (up 14 per cent year-on-year) led to higher household spending and inflationary pressures. The central bank reacted by increasing the policy rate stepwise from 10.75 to 11 per cent in February and to 12 per cent in April 2021. As a result, inflation decelerated to 8.3 per cent in April 2021 from 9.45 per cent in December 2020.
The country’s public debt reached almost 48 per cent of GDP in 2020 up from 43 per cent in 2019, as the government relied on external financing to mitigate the impact of the pandemic.
However, debt sustainability is not an immediate concern thanks to the current account reverting to a surplus of around 4 per cent of GDP in 2020, and a build-up of convertible foreign currency reserve assets.
The IMF emergency assistance received in spring 2020 is conditioned on fiscal consolidation – a challenge given continued investment in Roghun, the country’s flagship hydropower project.
The economy is expected to grow by 6.5 per cent in 2021 with remittances supporting private consumption and expenditure on Roghun driving public investment. In 2022, real GDP is forecast to grow by 6.0 per cent.
Downside risks relate to the pandemic continuing to disrupt trade and mobility. The main upside risk is associated with a rapid intensification of trade, transport and investment linkages with Uzbekistan.
Tajikistan in the EBRD’s 2020-21 Transition Report