By Abdul Kerimkhanov
Tajikistan’s GDP indicators will slow down to 5.5–5.0 percent over the period of 2020-2021, according to the latest report of World Bank (WB), published in its official website.
In particular, real GDP growth slowed from 7.3 percent in 2018 to 6.2 percent in 2019, and will slow further. At the same time, Tajikistan’s reported real GDP growth rate remained robust at 7.2 percent year-on-year in January-September 2019, similar to the growth rates of 7.1–7.3 percent recorded in 2017-2018.
While international prices for aluminum and cotton increased, prices for precious metals declined, negatively affecting Tajikistan’s export earnings.
With import spending also falling, reflecting delays in public investment projects, the trade deficit narrowed year-on-year in January-June 2019. Together with a reduction of the trade deficit in services and income transfers, this drove a reduction in the current account deficit to seven percent of GDP in the first half (compared to a deficit of 11 percent of GDP in the same period of 2018).
A projected recovery in the import bill in the fourth quarter of 2019 will keep the current account deficit at around five percent of GDP in 2019, relatively unchanged to the 2018 deficit of 5.1 percent of GDP.
Despite challenges in revenue collection, the authorities managed to limit the budget deficit to about 2.8 percent of GDP during January-September 2019. This outcome is consistent with the fiscal consolidation push launched in 2018 when the fiscal deficit fell to 2.7 percent of GDP (from 6.7 percent in 2017).
However, with public investment execution at just 80 percent in January-September 2019, spending pressures are expected to intensify in the final quarter of 2019. As a result, the fiscal deficit is projected to rise to 3.5 percent of GDP in 2019.
Tajikistan’s public external debt amounted to $2.9 billion (40 percent of GDP) at the end of 2018, up from 24 percent of GDP in 2014.
Tajikistan is among the top 10 business climate reformers worldwide in Doing Business 2020, with the ranking of 106th out of 190 economies globally, thanks to its reforms in the area of getting credit, starting a new business and facilitating export of goods. Despite substantial progress, however, Tajikistan continues to underperform in the areas of getting electricity (ranked 163 of 190), resolving insolvency (153), paying taxes (139), and dealing with construction permits (137).
Abdul Kerimkhanov is AzerNews’ staff journalist, follow him on Twitter: @AbdulKerim94
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