Tajikistan's economy to grow, but more slowly in next 2 years

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The growth of Tajikistan's economy will slightly slow down in 2024 and 2025 due to a decrease in remittances from abroad, fiscal space constraints, and reduced global demand for Tajikistan's main export goods, predict experts from the Asian Development Bank (ADB), Asia Plus reports.

"The country's GDP will grow by 6.5% in both this and next year after growing by 8.3% in 2023," says the "Asia Development Outlook for April 2024" - the main economic report of the ADB.

The report's authors note that the relatively high growth in 2023 was due to the growth of agriculture and construction, as well as the growth of the services sector.

"Tajikistan faces serious climate problems and risks that could lead to irreversible economic, social, and environmental damage," said ADB Resident Representative in Tajikistan Shanny Campbell. "Developing a green economy is key to the country's sustainable growth."

The report emphasizes that due to population growth, the shortage of arable land in Tajikistan has led to a heavy dependence on imported foodstuffs, weakening food security and increasing vulnerability to natural disasters.

"In the last 34 years, the country has lost about 20% of its glaciers. This poses a serious threat to the economy, as the country largely depends on rivers fed by glaciers for hydroelectric power production," the publication says.

It is noted that with the support of the ADB, the government has prepared and adopted the Green Economy Development Strategy until 2027, which identifies 11 priority areas, including energy efficiency, waste management systems, and ecotourism.

"The government intends to increase the capacity of renewable energy sources to 10,000 megawatts and achieve full production of environmentally friendly electricity and zero emissions by 2037," the report emphasizes.

ADB experts urge the government of Tajikistan to adopt a climate-oriented policy and introduce a comprehensive climate fiscal framework to improve planning, budgeting, and implementation of the Green Economy Development Strategy.

"The government may also consider the possibility of updating state procurement policies and construction standards by integrating green economy principles," the report's authors believe.

Meanwhile, inflation in Tajikistan in 2024 and 2025, according to updated forecasts by the ADB, will reach 5.5% and 6.5% respectively.

ADB economists expect that currency interventions will mitigate the growth and volatility of the exchange rate. "Inflation growth is due to the expected increase in lending as deposits increase, a 40% increase in pensions, scholarships, and salaries of budget employees from January 1, 2024, and a 16% increase in electricity tariffs, which also came into force on the first day of this year," the report concludes.


April 11, 2024