April 2020. Republic of Tajikistan: trends and forecasts

13 April 2020

The growth of the Tajik economy accelerated in 2019 amid households’ strong consumer activity and rising output in the mining and metallurgical complex and agriculture. The EDB projects the country’s GDP growth to keep within the 7–7.5% range in 2020–2022, despite the adverse effects of the coronavirus epidemic, as the budget’s social spending increases and metallurgy output grows. Later on, economic growth will trend towards its potential rate that we estimate at 7%.

Inflation accelerated in 2019 as food prices rose. Other goods in the consumer basket kept appreciating at a stable rate. The EDB expects the easing of external inflationary pressure to cause price growth in the consumer market to decelerate into the NBT target range for 2020 (6±2%).

The refinancing rate of the National Bank of Tajikistan was reduced to 12.25% last year (vs. 14% as of the end of 2018); however, due to accelerating inflation it was raised to 12.75% early this year. According to the EDB base case projections, the rounds of policy rate reductions are expected to resume in 2021 as the external setting normalizes.

In 2019 the State budget posted a deficit of 0.6% of GDP after 1.0% of GDP the year before. We expect more moderate investment in the development of energy infrastructure compared with 2018–2019 to assist the Government in fulfilling its plans to reduce the deficit to 0.4–0.5% of GDP in 2020–2022 and keeping public debt under control.

Back to the list