Tajikistan: Economic Outline

Economic Indicators

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Tajikistan is a lower-middle-income, mountainous country with an economy based mainly on mineral extraction, metal processing, agriculture and the remittances of citizens working abroad. The last twenty years saw steady growth and, although at a slower pace, the economy continued to grow even amid the global COVID-19 crisis (+4.5% in 2020). The IMF estimated growth at 5% in 2021, thanks to an increase in private and public consumption. For 2022, the IMF forecasts growth at 4.5%, followed by 4% in 2023, albeit the conflict in Ukraine may represent a downward risk as expatriate remittances (25% of GDP) from Russia will probably be negatively affected.

The country has a structural budget deficit which widened to 4.4% in 2021 amid reduced revenues and increased spending for social assistance and healthcare. Expenditures are expected to increase in 2022, in particular for the financing of social programmes to address rising poverty. Coface expects the budget deficit to reach 5% of GDP in 2022. Public, external and foreign currency debt was estimated at around 49.3% of GDP for 2021, with the main creditor being China’s Eximbank (40% of the total). For 2021-2023, the Asian Development Bank supplied USD 323 million in grants. The debt-to-GDP ratio should follow a downward trend over the forecast horizon (48.1% this year and 47.6% in 2023 - IMF). Foreign exchange reserves should remain at around USD 2 billion (covering around eight months of imports and half of the total debt). Meanwhile, the increase in imports combined with a rise in world food prices fuelled inflation, which stood at 8% last year and should stabilize around 6.5% in 2022-23.
 Overall, the private sector’s role in the economy remains limited, contributing to only 13% of formal employment and 15% of total investments (World Bank). The country’s economy is quite balanced, with agriculture representing 23.8% of GDP, and industry and services having a similar share (32.8% and 35.3%, respectively – World Bank).

The population is relatively poor in Tajikistan. Since independence, the country has made enormous progress in reducing poverty: between 2000 and 2018, poverty dropped from 83% to 27.4%, according to the World Bank’s latest figures. Some 6.9 million people, including 2.8 million children, require support due to high malnutrition rates, inadequate access to water and hygiene, disruptions to learning, exacerbated poverty and heightened protection risks. Following the outbreak of the COVID-19 pandemic, a growing share of the population has reported reducing their food consumption, and the inability of previously returned migrants to travel abroad led to a significant increase in the unemployment rate, estimated at 7.6% by the World Bank.

Monetary Indicators	2016	2017	2018	2019	2020
Tajikistan Somoni (TJS) - Average Annual Exchange Rate For 1 GBP	10.58	11.00	12.21	11.88	13.23

Source: World Bank - Latest available data.

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Latest Update: February 2023