Press Release No. 10/146

Press Release: Statement at the Conclusion of an IMF Staff Mission to the Republic of Tajikistan

April 13, 2010

An International Monetary Fund (IMF) team, led by Mr. Axel Schimmelpfennig, visited Dushanbe April 7–13, 2010 to continue discussions for the combined first and second reviews under a three-year, SDR 78.3 million (about US$116 million) Extended Credit Facility arrangement with Tajikistan (see Press Releases No. 09/136 and No. 10/37). The IMF mission reached a staff-level agreement with the Tajik authorities on their 2010 program.

This agreement requires approval by the IMF’s Executive Board which is expected to consider Tajikistan’s request for the completion of the first and second review at end-May 2010. Upon approval, SDR 26.12 million (about US$42 million) would be made available to Tajikistan. This would bring the total disbursement under the arrangement so far to SDR 52.2 million (about US$82 million).

At the conclusion of the visit, Mr. Schimmelpfennig made the following statement:

“The economic outlook for Tajikistan is cautiously optimistic, and we project a real GDP growth of 4 percent in 2010. Remittances have shown signs of strength in January/February, increasing by 14 percent over the same period in 2009. Likewise, exports showed strong growth of 45 percent year-on-year in January/February. Encouragingly, electricity supply was much improved in the first months of 2010, and industry has shown positive growth for the first time in over a year. However, there is uncertainty over the strength and sustainability of the rebound in remittances and exports.

“For 2010, the government targets a modest widening of the overall fiscal deficit excluding externally financed investment to 1 percent of GDP in 2010, from 0.5 percent of GDP in 2009. This will allow further increases in social expenditures, including on health and education, while also moving forward with the government’s public investment program. The government should seize opportunities to further increase social spending while adhering to its deficit target.

“We welcome the government’s commitments to strong governance in the context of the Roghun project, including having external audits of the Roghun OJSC and providing regular reports to the public on the use of funds. The mission concurs with the governments’ projections that equity sales for Roghun will be low over the remainder of the year.

“The IMF welcomes the government’s cooperation with the World Bank on the Roghun project, and in particular the ongoing techno-economic, social and environmental impact assessments.”