Republic of Tajikistan. Recent social and economic trends and short-term prospective. September 2019

04 July 2019

In the first half of 2019, Tajikistan's economy grew by 7.5% amid a sharp acceleration in inflation, primarily food one. The key driver of growth remains public investment aimed at the implementation of major projects, in particular, the construction of the Rogun HPP. The decline in total investment led to a slowdown in investment and intermediate imports, which resulted in a slight reduction in the foreign trade deficit. The dynamics of inflation was formed mainly under the influence of non-monetary factors, in particular due to the shock of food prices. There is an improvement in banking indicators and gradual recovery (after the banking crisis of 2016) of the credit growth. In the coming years, Tajikistan is expected to maintain high rates of economic growth due to increased consumption and investment. The widening state budget deficit and significant quasi-fiscal risks have a negative impact on the debt sustainability of the Republic.