Press Release No. 18/386

IMF Staff Concludes Visit to Tajikistan

October 9, 2018

At the request of Tajikistan’s authorities, an International Monetary Fund (IMF) mission led by Ms. Padamja Khandelwal visited Dushanbe from September 11-26, 2018 to discuss an economic reform program that could be supported by an IMF financial arrangement.

At the end of the visit, Ms. Khandelwal issued the following statement:

“Since 2014, Tajikistan’s economy has suffered from external shocks which weakened economic confidence, reduced fiscal space and external buffers, and increased vulnerabilities, including in the financial sector. In response, the authorities have embarked on reforms to put the energy sector on a sound financial footing, strengthen the financial sector, and develop the monetary policy framework. The IMF stands ready to partner with Tajikistan to restore macroeconomic stability and secure strong, durable and inclusive growth in the years ahead.”

“There are downside risks to the fiscal outlook owing to infrastructure projects. Managing these risks will require significant fiscal consolidation to maintain debt sustainability. A growth-friendly fiscal consolidation to reduce the risks of debt distress can be achieved by optimizing non-priority capital expenditures and improving the efficiency of public spending, while strengthening the social safety net to protect poor and vulnerable groups. Decisive measures are needed to restore the confidence of depositors in the banking system. The IMF team welcomes recent measures to improve regulation and supervision, asset classification and provisioning, and management of foreign exchange and credit risk by banks. However, more needs to be done to implement the recommendations of the 2016 Financial Sector Assessment Program (FSAP). In addition, decisive actions are needed to deal with the two large problem banks.”

“We have had productive discussions with the authorities on a possible IMF financial arrangement that would support these reforms. There is good will and partnership among the authorities and the IMF team. Further details need to be finalized. Hence, we plan to remain in close contact with the authorities to advance the possibility of IMF financial support. As always, the IMF stands ready to support Tajikistan and its people.”

“During its visit, the team met with First Deputy Prime Minister D. Said, Chairman of the National Bank of Tajikistan, J. Nurmahmadzoda, Minister of Finance F. Qahhorzoda, Minister of Economy Development and Trade N. Hikmatullozada and other officials. The mission also met with representatives of the banking sector and the development partner community. The team would like to thank the authorities for their warm welcome, hospitality, and productive discussions.”