Azernews.Az

Friday March 29 2024

ADB predicts slowdown in economic growth of Tajikistan

11 April 2018 12:28 (UTC+04:00)
ADB predicts slowdown in economic growth of Tajikistan

By Kamila Aliyeva

The Asian Development Bank (ADB) predicts a slowdown in economic growth at the level of 1.1 percent in Tajikistan in 2018.

According to the estimates of the bank's experts, the growth of the economy of the republic this year will be 6 percent.

In the Asian Development Review 2018, the bank forecasted GDP growth in Tajikistan at the level of 6 percent in 2018 and 6.5 percent in 2019. In 2017, GDP growth in the country amounted to 7.1 percent.

The review notes that ADB's projections for Tajikistan's economic growth in 2018 are based on the expected fiscal tightening in response to the high public debt-to-GDP ratio, which is likely to limit public investment, and the weak banking sector will hold back private investment.

Tajikistan's national debt last year exceeded $3.6 billion, which is 51 percent of the country's GDP. The size of Tajikistan's GDP in 2017 amounted to about $7 billion.

A slight increase in the forecast for growth in the economy for 2019 is due to the expected growth in industrial production and extraction of minerals, as well as an increase in the inflow of remittances.

ADB economists predict that inflation will rise to 7.5 percent in 2018, reflecting the high liquidity caused by the potentially significant recapitalization of banks, increasing wages and tariffs for electricity, as well as a moderate depreciation of the national currency.

Thus, according to the forecasts of ADB, in 2019 inflation will be 7.0 percent. In 2017, inflation was 6.7 percent.

Tajikistan is encouraged to create a sufficient number of jobs in response to the growing working-age population and to increase economic growth.

The publication says that Tajikistan does not generate enough productive jobs, despite the fact that on average the growth of the economy of Tajikistan from 1997 to 2016 was 7.2 percent.

It is noted that annually from 1991 to 2016 the number of able-bodied population increased by 3 percent, however, employment for the same period grew by only 0.7 percent annually.

The review highlights the need for structural reforms to improve the business climate, such as reducing and consolidating the number of inspection bodies, creating a sound banking sector and streamlining procedures for issuing construction permits, paying taxes and executing contracts.

It is also important to strengthen local value chains and assist small and medium-sized enterprises in increasing productivity and income to create jobs.

Tajikistan joined ADB in 1998. Tajikistan received ADB assistance only on a non-reimbursable basis in 2008-2015. ADB operations in Tajikistan focus on improved infrastructure, investment climate reforms, and improved food security.

ADB’s ongoing portfolio in Tajikistan in 2017 included 13 projects and one program amounting to $759 million, financed from 17 grants ($643 million) and four loans ($116 million).

Apart from energy and transport, ADB financing also focused on public sector management (6.7%); agriculture, natural resources, and rural development (6.6%); education (4.2%); and finance (2.5%). There were also 7 technical assistance grants totaling $13 million.

The Asian Development Bank was founded in 1966. The mission of the bank is to reduce poverty in the Asia-Pacific region (APR) through inclusive economic and environmentally sustainable growth, as well as regional integration. The head office of ADB is located in the capital of the Philippines - the city of Manila. The bank's shareholders are 67 countries, 48 of which are located in the Asia-Pacific region.

---

Kamila Aliyeva is AzerNews’ staff journalist, follow her on Twitter: @Kami_Aliyeva

Follow us on Twitter @AzerNewsAz

Loading...
Latest See more