## 1tjkea2021001 ## Source details **Canonical URL:** [1tjkea2021001](https://www.imf.org/-/media/files/publications/cr/2021/english/1tjkea2021001.pdf) ## Other formats - [Markdown version](/-/media/files/publications/cr/2021/english/1tjkea2021001.pdf.md) - [Structured JSON version](/-/media/files/publications/cr/2021/english/1tjkea2021001.pdf.json) --- ### Context - Tajikistan: poorest of the CCA countries with 2012 per capita GDP US$943 and high vulnerability to shocks. - Structural features and vulnerabilities: - Food imports: 58 percent share in the CPI. - Narrow export base: aluminum and cotton. - Remittances: equivalent to 48 percent of GDP and more than five times export earnings. - Remote, landlocked; periodic transport interruptions by Uzbekistan. - Uncertainty from NATO troop drawdown from Afghanistan and domestic tensions; presidential elections scheduled for November 2013. - Policy and institutional weaknesses: - Poor business climate; state-directed lending and investment crowd out private investment and foster rent seeking. - Medium-term fiscal framework target: keep public debt below 35 percent of GDP, but contingent liabilities from SOEs and banks exist. - Monetary policy traction weak; NBT policy effectively anchored to the U.S. dollar despite 2011 central bank law alignment with best practice; NBT independence weak. - AML/CFT framework being strengthened; certain deficiencies remain. - Authorities expressed interest in a successor ECF arrangement; discussions to continue after November 2013 elections. ### Staff advice vs Policy action (Fiscal, Monetary, Structural) — key items - Fiscal - Staff advice: Pursue fiscal consolidation; balance current and capital expenditures. - Policy action: - Fiscal position moved from a deficit of 0.4 percent of GDP (excluding PIP) in 2010 to a surplus of 1.9 percent of GDP in 2012. - Social and poverty-related expenditure increased; capital investment remains high. - Staff advice: Improve tax administration, simplify tax regime, expand tax base. - Policy action: New tax code effective 1/1/13; simplifies regime and broadens base; IMF TA recommendations largely implemented. - Staff advice: Develop domestic debt market. - Policy action: T-bills auctioned once a month; single maturity of 91-days; yields do not reflect market pricing. - Staff advice: Procurement for strategic reserves should be fiscal operations, avoid blanket subsidies. - Policy action: Directed lending continues (e.g., large AIB loan to State Materials Reserve Agency in Q1 2013). - Monetary, exchange rate, financial sector - Staff advice: Contain inflation by reducing liquidity lending consistent with net domestic assets and reserve money paths. - Policy action: NBT liquidity lending fell sharply after AIB bailout in April 2012; monetary stance consistent with single-digit inflation. - Staff advice: Take flexible approach to exchange rate. - Policy action: Partially met; further flexibility needed. - Staff advice: End directed lending; require full provisioning for uncollateralized portion of NPLs; uniform NPL classification; tighter reclassification standards. - Policy action: Directed lending continues; provisioning requirements tightened and uniform classification applies, but provisioning still falls short of NBT regulations. - Structural reforms - Staff advice: Create self-sustaining mechanism for agricultural financing. - Policy action: Agricultural reforms progressed but sustainable financing model not emerged; directed lending persists. - Staff advice: Enhance AML/CFT framework per 2008 Eurasian Group mutual evaluation. - Policy action: Timely progress on FATF action plan, though deficiencies remain. - Staff advice: Enhance social safety nets through better targeting. - Policy action: Slow progress; pilot projects with EU and World Bank outside Dushanbe. ### Recent developments and short-term outlook - Growth and inflation - Real GDP growth: 7.5 percent in 2012. - Growth: 7.3 percent through Q1 2013; projected to ease to under 7 percent by year-end. - Headline inflation: declined from 9.3 percent at end 2011 to 6.4 percent by end 2012; annual CPI inflation in Q1 2013 held at 6.5 percent. - External sector - Current account deficit: shrank from 4.7 percent of GDP in 2011 to 1.3 percent of GDP in 2012. - Gross remittances growth: 26.8 percent in 2012. - Total public and publicly guaranteed external debt: fell to 28.3 percent of GDP at end 2012 from 32.1 percent a year earlier. - Gross international reserves: 1.6 months of imports at end 2012; REER broadly in line with fundamentals. - Fiscal developments - 2012 fiscal position (excluding PIP): surplus of 1.9 percent of GDP. - Drivers: stronger tax and non-tax revenues; lower domestically financed capital expenditure (Roghun construction temporarily halted). - Social spending: budgeted increases (double-digit minimum wage and pension increases) implemented September 2012. - Total public and publicly-guaranteed debt: just over 32 percent of GDP at end 2012. - 2013 fiscal deficit (excluding externally-financed PIP): projected to loosen by 2 percent of GDP relative to 2012 outcome. - Monetary and banking sector - Reserve and broad money growth in 2012 slower than expected. - After AIB write-off in 2012, credit to private sector grew by about 9 percent. - Banking vulnerabilities: low profitability, rising NPLs, high lending-deposit spreads. - System-wide capital adequacy: 23.3 percent, but stress tests indicate vulnerabilities in large banks. - Government bailout of AIB (2012): Ministry of Finance purchased bad loans for SM 500 million at virtually no discount and injected SM 200 million as capital; fiscal cost of 2 percent of GDP; government acquired 52 percent stake in AIB while private shareholders retained remaining equity and effective management control. - Early 2013: unsecured government-directed loan to State Materials Reserve Agency of SM 150 million breached single borrower exposure limit (74 percent of regulatory capital vs allowed maximum 20 percent), eroding AIB liquidity. ### Medium-term outlook and risks - Baseline scenario - Robust—but moderating—growth, single-digit inflation, slight deterioration in current account. - Assumptions: gradual fiscal consolidation consistent with debt sustainability; moderate Roghun HPP construction pace; little improvement in electricity supply. - Fixed capital investment projected to firm in outer years partly due to increased donor financing. - Inflation contained by benign food and fuel prices, planned fiscal consolidation, and appropriate monetary policy. - Debt sustainability - Risk of debt distress improves to moderate with remittances included in the LIC DSA. - Debt vulnerability depends critically on steady remittance flows; a standard shock to remittances assessed to lead to breach of debt thresholds. - Key risks - Adverse import (food and fuel) and export (cotton and aluminum) price shifts. - Sustained weak growth in Russia reducing remittances. - Failure to resolve weak financial institutions and stop directed lending, limiting financial market development and fiscal sustainability. - Geopolitical/regional risks: NATO withdrawal from Afghanistan, transport blockades by Uzbekistan, domestic tensions. - Upside risks: faster structural reform, stronger remittance growth, potential hydrocarbon discoveries. - Authorities’ stance: NBT and MOF broadly concur on outlook and commodity/regional risks but ambivalent about urgency of resolving weak banks, shifting to market-based financing, and stopping directed lending. ### Risk Assessment Matrix — selected short- and medium-term risks & policy responses - Short-term risks (selected) - Financial stress in Euro Area / EM capital flow reversal (Likelihood: M*; Direction: ↓) - Impact: High; could create financing gap close to 3 percent of GDP with little reserve buffer (1/2 month import cover) per VE-LIC shock. - Policy response: Allow more exchange rate flexibility; seek more external financing; increase targeted social spending. - Severe remittance slowdown from EM slowdown (Likelihood: M*; Direction: ↓) - Impact: High. - Policy response: Same as above. - Escalation of domestic social/political tensions (Likelihood: M; Direction: ↓) - Impact: High. - Policy response: Use fiscal supportively; re-orient spending to pressing social needs. - Global oil shock to $140 per barrel (Likelihood: L*; Direction: ↓) - Impact: Medium. - Policy response: Allow internal price adjustment; increase social spending; use exchange rate flexibility. - Insolvency of commercial banks due to directed lending (Likelihood: H; Direction: ↓) - Impact: High. - Policy response: Halt directed lending; accelerate bank restructuring; enforce prudential norms and AML measures. - Medium-term risks (selected) - Instability in Afghanistan (Likelihood: M; Direction: ↓) - Impact: High. - Policy response: Need for more external financing. - Escalation of dispute with Uzbekistan over Roghun HPP (Likelihood: M; Direction: ↓) - Impact: High. - Policy response: Diversify trading partners; improve alternate transport links. ### Policy discussions — overarching objectives (Box 2) - Focus areas: 1. Reduce vulnerabilities to external shocks. 2. Make growth more inclusive and private-sector led by bolstering private investment and deepening financial intermediation. 3. Address fiscal vulnerabilities and strengthen public sector governance. ### A. Strengthening external accounts — findings and recommendations - Findings: - Exports < 18 percent of GDP in 2012. - Key export concentrations: aluminum tolling fee and cotton at 12 percent and 15 percent, respectively, of goods and services exports. - Food and fuel imports: 18 percent of merchandise imports. - International reserves end 2012: US$ 0.7 billion (1.6 months of import cover); reserve adequacy tool suggests 2.7 months. - CPI food share: 58 percent. - Staff recommendations: - Pursue ambitious international reserve build-up through greater exchange rate flexibility. - Convert stocks of non-monetary gold to monetary gold. - Improve transparency and business climate; consistent enforcement of prudential regulations; rapid WTO commitments implementation. - Authorities’ views/actions: - NBT committed to allow greater exchange rate flexibility and indicated conversion of non-monetary to monetary gold likely in the second half of this year. - MOF considering converting its non-monetary gold and selling it to NBT. - WTO entry on March 2, 2013; authorities assessing tariff rationalization and transit agreements; legislation to liberalize the capital account under consideration. ### B. Making growth inclusive and private-sector led — diagnosis and reform priorities - Findings: - Growth not inclusive; job creation weak. - State-directed lending displaces private investment; weak governance in large banks (example: AIB). - Financial intermediation weak: low money and bank credit shares of GDP; economy largely cash based; short-term bank loans; limited SME access to finance; shallow interbank and government securities markets. - Remittances: over 90 percent originate from Russia. - Labor market: staff estimates that real growth of at least 9 percent needed to absorb new entrants; official unemployment 2–3 percent; alternative sources report 10–40 percent. - Staff recommendations (three priority areas): 1. Halt directed lending urgently and resolve AIB properly; bring in international managers to improve governance. 2. Develop interbank and government debt markets: increase T-bill maturities beyond 91 days; allow price discovery; rates to rise from current 2 percent. 3. Strengthen central bank independence, bank supervision, and align regulatory standards to international practice. - Authorities’ views: Agree on benefits of market-based financial sector; NBT emphasized government securities market development; willingness to consider foreign management for AIB though broader support limited. ### C. Reducing fiscal vulnerability and strengthening public sector governance - Findings: - Government deposits: 15 percent of revenues (half pre-crisis level). - Amortization of foreign debt increasing sharply; deposit buffer could be depleted over next two years without buffers. - SOEs not well integrated into budget; uneven reporting; high arrears. - Talco Management (TM) audit (late 2011) shows substantial untaxed profits held offshore; lack of transparency. - Staff recommendations: - Retain zero limit on contracting or guaranteeing new external non-concessional debt in near term. - Include remittances in DSA thresholds—moves risk from high to moderate. - Gradually move to small fiscal surpluses to stabilize public debt/GDP. - One-off sale of MOF non-monetary gold to NBT to boost fiscal buffers. - Gradually increase domestic borrowing envelope to support cash management and limit quasi-fiscal operations. - Strengthen large taxpayer inspectorate (LTI); implement dividends policy for all SOEs including TM. - Strengthen SOE monitoring unit; bring more SOEs under oversight; develop plan to address fiscal risks from SOEs and problem banks. - Authorities’ views: Acknowledge need for prudent fiscal management and rebuilding buffers; favor concessional external borrowing; considering dividends policy for SOEs but no consensus on including TM in MOF oversight. ### Staff appraisal — priorities - Reassess medium-term fiscal objectives with emphasis on rebuilding fiscal buffers. - Strengthen tax administration to support revenue amid higher external debt service. - Strengthen fiscal buffers via dividends policy for SOEs, sale of MOF non-monetary gold to NBT, collection on bad loans purchased from AIB, and re-privatization of government share in AIB over medium term. - Halt directed lending; protect the poor via targeted assistance; procurement for strategic reserves should be fiscal operations. ### Financial sector vulnerabilities and required actions - Findings: - Financial sector underdeveloped due to weak governance and lack of government debt market development. - Progress: payments system strengthening, collateral registration reform, first private credit bureau operational. - Lack of decisive action on AIB protects vested interests and forfeits opportunity to minimize fiscal cost. - MOF reluctance to develop government debt market prevents instruments to strengthen monetary policy and creates rollover risks. - Policy recommendations: - Decisive resolution of AIB by hiring foreign managers. - Strict NBT enforcement of prudential norms across all banks. - Halt directed lending. ### Structural reforms: governance, transparency, and market orientation - Findings: - Progress under 2009–12 ECF on transparency of state enterprises and government operations is laudable. - Tax regime overhaul has potential revenue/competitiveness benefits. - SOE monitoring unit in MOF established. - Policy recommendations: - Adopt dividends policy for SOEs. - Publish 2008–10 audits of Roghun HPP open joint stock company and continue such practice. - Include Talco Management (TM) in MOF SOE monitoring unit and apply dividends policy to TM. - Continue FATF-approved AML/CFT action plan implementation, strengthen compliance with FATF standards. ### Data provision and technical assistance - Findings: - Data provision to the Fund for surveillance broadly adequate; Tajikistan participates in GDDS. - Recommendations: - Further IMF TA to improve national accounts, balance of payments, and external debt data. ### Debt levels, composition, and DSA highlights - Public debt stock declined from about 90 percent of GDP in 2002 to 32.3 percent of GDP in 2012. - Most debt denominated in foreign currency: around 28.3 percent of GDP in 2012. - Domestic public debt: 4 percent of GDP (12 percent of total public debt) at end-2012; T-bill issuance in 2012 (excluding AIB/NBT recap) was 0.21 percent of GDP. - AIB bailout in 2012 contributed about 2 percent of GDP to domestic debt stock. - PPG external debt end-2012: 28.3 percent of GDP; share of China in PPG external debt: about 41.1 percent (per authorities). - Private external debt: 18.3 percent of GDP in 2012; projected 17.9 percent in 2013. - Total external debt: 46.6 percent of GDP in 2012; 44.9 percent forecast for 2013. - Total external debt (billion US dollars): 2012: 3.5; 2013: 3.8. - PPG debt (billion US dollars): 2012: 2.2; 2013: 2.2. - Private debt (billion US dollars): 2012: 1.4; 2013: 1.5. - Total domestic public debt (billion US dollars): 2012: 0.3; 2013: 0.3. - Remittances: equivalent to 48 percent of GDP and 261 percent of exports of goods and services in 2012 (elsewhere noted as 47½ percent of GDP). - DSA: including remittances moves risk of debt distress from high to moderate; remittance-adjusted thresholds: PV of debt to exports and GDP = 80 and 27 respectively; debt service threshold = 12 percent of exports. - Macroeconomic assumptions: - Real GDP growth: projected 6¾ percent in 2013; 5¾ percent over medium/long term; ten-year historical average 7½ percent. - Migrants’ remittances: 47½ percent of GDP in 2012; expected to grow at 9¼ percent over medium term and 9 percent over long term. - Reserve coverage projected to build to about 2¼ months of imports by 2018 and about 2¾ months over the long run. - DSA stress tests: - One-standard-deviation shortfall in non-debt creating flows (mostly remittances) creates prolonged breaches in debt stock ratios. - Non-debt creating flows composition in 2012: remittances 92 percent, official transfers 3 percent, FDI 5 percent. - Public DSA: PV of public debt-to-GDP projected to decline gradually under baseline; vulnerability to permanently lower GDP growth and higher debt-creating flows. ### Key macro-fiscal projections and indicators (selected values from Table 1: 2010–18) - Real GDP: 2010 6.5; 2011 7.4; 2012 7.5; 2013 6.8; 2014 5.8; 2015 5.8; 2016 5.8; 2017 5.8; 2018 5.8 - Headline CPI inflation (end-of-period): 2010 9.8; 2011 9.3; 2012 6.4; 2013 7.0; 2014–2017 7.0; 2018 6.0 - Investment (percent of GDP): 2010 17.9; 2011 20.5; 2012 17.5; 2013 18.5; 2018 20.9 - Revenue and grants (percent of GDP): 2010 23.2; 2011 24.9; 2012 25.1; 2013 26.1; 2018 25.9 - Expenditure and net lending (percent of GDP): 2010 26.9; 2012 24.5; 2013 28.4; 2018 28.7 - Overall balance (incl. PIP) (percent of GDP): 2010 -3.7; 2011 -2.0; 2012 0.7; 2013 -2.3; 2018 -2.7 - Total public and publicly-guaranteed debt (percent of GDP): 2010 36.3; 2012 32.3; 2013 30.7; 2018 31.5 - Broad money (12-month percent change): 2010 25.4; 2011 46.8; 2012 15.5; 2013 18.1 - Credit to private sector (12-month percent change): 2010 -25.7; 2011 23.9; 2012 8.9; 2013 17.2 - Current account balance (percent of GDP): 2010 -1.2; 2011 -4.7; 2012 -1.3; 2013 -1.7 ### General government operations (selected magnitudes) - Overall revenues and grants (millions of somoni): 2010 5,722; 2011 7,483; 2012 9,089; 2013 10,884 - Tax revenues (millions of somoni): 2010 4,436; 2011 5,833; 2012 7,163; 2013 8,192 - VAT (millions of somoni): 2010 1,823; 2011 2,511; 2012 3,056; 2013 3,569 - Total expenditures and net lending (millions of somoni): 2010 6,457; 2011 8,127; 2012 8,890; 2013 11,852 - Capital expenditures (millions of somoni): 2010 2,693; 2011 3,756; 2012 3,240; 2013 4,277 ### Central bank and monetary accounts (selected levels) - Net foreign assets (millions of somoni, end-period): Dec-10 1,251; Dec-11 1,788; Dec-12 2,354; Dec-13 3,222 (proj.) - Net international reserves (millions of somoni): Dec-10 1,134; Dec-11 1,815; Dec-12 2,433; Dec-13 3,569 (proj.) - Reserve money (end-period, millions of somoni): Dec-10 2,990; Dec-11 3,823; Dec-12 4,530; Dec-13 5,279 (proj.) - Broad money (end-period, millions of somoni, excl. bills payable): Dec-10 5,078; Dec-11 7,406; Dec-12 8,524; Dec-13 10,064 (proj.) - Credit to private sector (millions of somoni, end-period): Dec-10 3,291; Dec-11 4,080; Dec-12 4,443; Dec-13 5,206 (proj.) - Deposit dollarization: 61.9 in 2010; 62.5 in 2011. ### Balance of payments and external sector (selected) - Migrants' remittances, net (millions of U.S. dollars): 2010 2,040; 2011 2,293; 2012 2,627; 2013 3,353 (proj.) - Gross reserves (millions of U.S. dollars): 2010 476; 2011 557; 2012 572; 2013 699 (proj.) - Total PPG external debt (millions of U.S. dollars): 2010 1,911; 2011 2,260; 2012 2,094; 2013 2,150 (proj.) ### Financial soundness indicators (selected) - Tier I capital (% of risk-weighted assets): 2010 24.5; Dec-11 21.3; Dec-12 23.3 - Reported total capital to risk-weighted assets (K1-1): 2010 26.3; Dec-11 24.4; Dec-12 25.9 - Nonperforming loans to gross loans: 2010 17.2; Dec-11 14.1; Dec-12 18.2 - Reported return on assets (ROA): 2010 0.8; Dec-11 -0.4; Dec-12 0.2 ### Competitiveness, REER, and reserves - REER: somoni appreciated in recent months; CGER-type average indicates overvaluation of 0.3 percent (within forecast error); individual estimates range from undervaluation of 5.5 percent to overvaluation of 3.6 percent. - Gross reserves: US$ 0.7 billion (1.6 months of imports); expected end-2013 reserves about US$ 1 billion (1.9 months of imports). - Reserve adequacy tool suggests appropriate level: 2.7 months of imports with 2 percent cost of holding reserves. - Policy suggestions: allow exchange rate flexibility; convert non-monetary gold to monetary gold to build hard-currency buffers; pursue structural reforms and export diversification. ### Data dissemination and metadata - Authorities interested in graduating from GDDS to SDDS; national SDDS coordinator appointed; TA requested. - Data ROSC published March 30, 2005; IFS country page published since February 2003. - TAJIKISTAN: Table of Common Indicators Required for Surveillance (as of March, 2013) lists latest observation and reporting frequencies for exchange rates, reserves, reserve/base money, broad money, central bank and banking system balance sheets, interest rates, CPI, government finance, external current account, GDP/GNP, gross external debt. - Data quality assessments (methodological soundness and accuracy/reliability) reflect a mix of O, LO, LNO assessments as per Data ROSC. *Source: IMF staff report material for the Republic of Tajikistan (selected figures, tables, and text provided in the document).* ### 1. How Much Traction Did Previous IMF Advice Receive? __________________________________________5 ### 1. How Much Traction Did Previous IMF Advice Receive? ### Context - Tajikistan is described as the poorest of the CCA countries with 2012 per capita GDP US$943 and high vulnerability to shocks. - Key structural features and vulnerabilities: - Heavy reliance on imports of food (58 percent share in the CPI) and fuel. - Narrow, commodity-driven export base (aluminum and cotton). - Extraordinary dependence on remittances, equivalent to 48 percent of GDP and more than five times export earnings. - Remote, landlocked location with periodic transport interruptions by Uzbekistan. - Uncertainty from expected drawdown of NATO troops from Afghanistan and periodic domestic violence tied to civil war legacies. - Presidential elections scheduled for November 2013. - Policy and institutional weaknesses: - Poor business climate and weak policy frameworks; state-directed lending and investment crowd out private investment and contribute to rent seeking. - Medium-term fiscal framework aims to keep public debt below 35 percent of GDP, but contingent liabilities arise from quasi-fiscal spending via SOEs and banks. - Monetary policy traction is weak due to underdeveloped financial markets; NBT policy effectively anchored to the U.S. dollar. - 2011 central bank law aligns with best practice, but NBT independence is weak; uneven prudential enforcement and liquidity loans to banks continue. - AML/CFT framework is being strengthened (customer due diligence measures), although certain deficiencies remain. - Authorities expressed interest in a successor ECF arrangement; discussions on a possible Fund-supported program expected to continue after the November 2013 elections. ### Box 1 — Summary: Staff Advice vs Policy Action (Fiscal, Monetary, Structural) - Fiscal policy advice and observed actions: - Staff advice: Pursue fiscal consolidation to ensure medium-term fiscal and debt sustainability while balancing current and capital expenditures. - Policy action: Fiscal position moved from a deficit of 0.4 percent of GDP (excluding PIP) in 2010 to a surplus of 1.9 percent of GDP in 2012. Social and poverty-related expenditure increased; capital investment remains high. - Staff advice: Facilitate tax revenues by improving tax administration, simplifying the tax regime, expanding the tax base. - Policy action: A new tax code was introduced on 1/1/13; it simplifies the tax regime and broadens the tax base. IMF TA recommendations on tax administration are largely being implemented. - Staff advice: Continue development of the domestic debt market. - Policy action: T-bills are auctioned once a month, but yields do not reflect market pricing and there is a single maturity of 91-days. - Staff advice: Operations to procure food and fuel for strategic reserves should be fiscal operations rather than through the banking system; avoid blanket subsidies. - Policy action: Authorities continue to use directed lending for such operations, evidenced by a large loan AIB was directed to extend to the State Materials Reserve Agency in Q1 2013. - Monetary, exchange rate and financial sector advice and actions: - Staff advice: Monetary policy to focus on containing inflation through reduction of liquidity lending consistent with net domestic assets and reserve money paths. - Policy action: NBT liquidity lending fell sharply after the government bailout of AIB in April 2012; monetary stance consistent with single-digit inflation. - Staff advice: Take a flexible approach to exchange rate management. - Policy action: Partially met; further effort needed to increase flexibility. - Staff advice: Address structural weaknesses: end directed lending, require full provisioning for uncollateralized portion of NPLs, uniform NPL classification, tighter reclassification standards. - Policy action: Directed lending continues. Provisioning requirements tightened and uniform classification applies, but provisioning for NPLs still falls short of NBT regulations. - Structural reform advice and actions: - Staff advice: Create a self-sustaining mechanism for agricultural financing. - Policy action: Agricultural reforms progressed, but a sustainable agricultural financing model has not emerged; directed lending still targets the sector. - Staff advice: Enhance AML/CFT framework per Eurasian Group 2008 mutual evaluation recommendations. - Policy action: Timely progress on action plan agreed with FATF, though certain deficiencies remain. - Staff advice: Enhance social safety nets through better targeting. - Policy action: Slow progress, with pilot projects involving EU and World Bank assistance outside Dushanbe. ### Recent Developments and Short-Term Outlook - Growth and inflation: - Real GDP grew 7.5 percent in 2012, supported by strong services (fueled by remittances), agriculture, and industry. - Growth held at 7.3 percent through the first quarter of 2013, projected to ease to under 7 percent by year-end due to slowing growth in Russia and anticipated declines in aluminum production and exports. - Headline inflation declined from 9.3 percent at end 2011 to 6.4 percent by end 2012; annual CPI inflation in Q1 2013 held at 6.5 percent. - External sector: - External current account (CA) deficit shrank from 4.7 percent of GDP in 2011 to 1.3 percent of GDP in 2012. - Rapid growth of gross remittances (26.8 percent) and slower import growth helped reduce the CA deficit. - Total public and publicly guaranteed external debt fell to 28.3 percent of GDP at end 2012 from 32.1 percent a year earlier. - The somoni relatively stable vis-à-vis the U.S. dollar; gross international reserves at just 1.6 months of imports at end 2012. - REER remains broadly in line with medium-term fundamentals and historical averages (Annex I). - Fiscal developments: - 2012 fiscal position moved to a surplus of 1.9 percent of GDP (excluding the PIP), outperforming the 2012 budget target. - Fiscal saving driven by stronger tax and non-tax revenues and lower domestically financed capital expenditure (temporary halt in Roghun construction). - Budgeted social spending, including double-digit minimum wage and pension increases implemented in September 2012, was fully implemented. - Total public and publicly-guaranteed debt stood at just over 32 percent of GDP at end 2012. - The fiscal deficit (excluding externally-financed PIP) is projected to loosen in 2013 by 2 percent of GDP relative to the 2012 outcome, consistent with the adopted 2013 budget and reflecting challenges implementing the new tax code, potential higher election-related expenditures, and full-year effect of 2012 social wage increases. Conservative budgeting practices may make the outcome less expansionary in practice. - Monetary and banking sector developments: - Reserve and broad money growth in 2012 were slower than expected due to lower inflation, NBT policy adjustments (lower refinance rate, reduced reserve requirements), budget over-performance, end-year sterilization, and decline in liquidity lending. - Broad money growth was suppressed partly by transfer of large Roghun HPP deposits from commercial banks to the NBT. - After write-off of bad loans at Agroinvestbank (AIB) in 2012, credit to the private sector grew by about 9 percent. - Banking system shows escalating vulnerabilities: low profitability, rising non-performing loans, high lending-deposit spreads. - System-wide capital adequacy is reported at 23.3 percent, but stress tests indicate vulnerabilities in large banks. - Government bailout of AIB in 2012: Ministry of Finance purchased bad loans for SM 500 million at virtually no discount and injected SM 200 million as capital; fiscal cost of 2 percent of GDP; government acquired a 52 percent stake in AIB while private shareholders retained remaining equity and effective control of management. - In early 2013, an unsecured government-directed loan to the State Materials Reserve Agency of SM 150 million breached the single borrower exposure limit (74 percent of regulatory capital against an allowed maximum of 20 percent) and further eroded AIB’s liquidity, compromising central bank independence and the level playing field. ### Medium-Term Outlook and Risks - Baseline medium-term scenario: - Characterized by robust—but moderating—growth, single-digit inflation, and a slight deterioration in the current account. - Adverse global conditions expected to weigh on near-term growth; growth eases further over the medium term due to slow structural reforms. - Outlook assumes gradual fiscal consolidation consistent with debt sustainability, a moderate pace of Roghun HPP construction (to be reassessed after World Bank feasibility studies), and little improvement in electricity supply. - Fixed capital investment projected to firm in outer years due in part to increased donor financing, but growth dividends muted by moderating remittance growth and slowing private consumption and investment. - Expectation of benign global food and fuel prices, planned fiscal consolidation, and appropriate monetary policy stance should contain inflation. - External current account path driven by slower remittances (linked to Russia) and import growth consistent with Roghun construction pace. - Debt sustainability: - Risk of debt distress improves to moderate with remittances included in the updated LIC DSA. - Risks remain: fiscal costs from directed lending and unreformed SOEs can increase public debt. - Debt sustainability depends critically on steady remittance flows; a standard shock to remittances is assessed to lead to breach of debt thresholds (DSA, Figure 1 and Table I, 1a and 1b). - Key risks highlighted: - Adverse shifts in import (food and fuel) and export (cotton and aluminum) prices would hurt inflation, current account, and reserves. - Sustained weak growth in Russia would reduce remittances, pressuring the external position and domestic growth. - Failure to resolve weak financial institutions and stop directed lending will limit financial market development, weaken fiscal sustainability, and reduce private investment and job creation. - Geopolitical and regional risks: NATO troop withdrawal from Afghanistan, periodic transport blockades by Uzbekistan, and domestic social tensions. - Upside risks: faster structural reform implementation, stronger-than-expected remittance growth, and potential hydrocarbon discoveries. - Authorities’ stance: - NBT and MOF broadly shared staff views on outlook and risks, concurring on commodity price and regional risks. - Authorities were ambivalent about the urgency of resolving weak banks, shifting to market-based financing, and stopping directed lending. ### Risk Assessment Matrix — Selected Risks and Policy Responses - Short-term risks: - Financial stress in Euro Area / Emerging Markets capital flow reversal (Likelihood: M*; Direction: ↓) - Impact: High. Transmission largely via Russia; could create a financing gap close to 3 percent of GDP with little reserve buffer (1/2 month import cover) per VE-LIC shock. - Policy response: Allow more exchange rate flexibility; seek more external financing; increase targeted social spending. - Deeper than expected slowdown in EMs leading to severe remittance slowdown (Likelihood: M*; Direction: ↓) - Impact: High. Remittances are a major income source and closely correlated with imports and construction/services. - Policy response: Same as above. - Escalation of domestic social and political tensions (Likelihood: M; Direction: ↓) - Impact: High. Could alter fragile political consensus. - Policy response: Use fiscal policy supportively and re-orient spending to pressing social needs. - Global oil shock to $140 per barrel (Likelihood: L*; Direction: ↓) - Impact: Medium. Current account sensitive to world market prices for food and fuel. - Policy response: Allow internal price adjustment; focus on second-round inflation effects; increase social spending to vulnerable groups; use exchange rate flexibility to protect reserves. - Insolvency of commercial banks due to directed lending (Likelihood: H; Direction: ↓) - Impact: High. Would increase recapitalization needs and public debt, undermining banking sector contribution to growth. - Policy response: Halt directed lending; accelerate bank restructuring while minimizing fiscal costs; fully enforce prudential norms and AML measures. - Medium-term risks: - Instability in Afghanistan (Likelihood: M; Direction: ↓) - Impact: High. Could increase refugees, radical faction influence, and lower investor confidence. - Policy response: More external financing would be needed. - Escalation of dispute with Uzbekistan over Roghun HPP construction (Likelihood: M; Direction: ↓) - Impact: High. Could worsen trade disruptions, raise transport costs and inflation. - Policy response: Diversify trading partners; improve alternate transport links. *Italicized line indicates staff source.* ### Box 2. Tajikistan: Risk Assessment Matrix ### Box 2. Tajikistan: Risk Assessment Matrix ### Policy discussions — overarching objectives - Focus areas: (i) reducing Tajikistan’s vulnerabilities to external shocks; (ii) making growth more inclusive and private-sector led, including by bolstering private investment and deepening financial intermediation; (iii) addressing fiscal vulnerabilities and strengthening public sector governance. ### A. Strengthening External Accounts — findings and near-/longer-term measures - Findings: - Trade is commodity based and narrow: exports were less than 18 percent of GDP in 2012. - Key export concentrations: aluminum tolling fee and cotton at 12 percent and 15 percent, respectively, of goods and services exports. - Food and fuel imports constitute 18 percent of merchandise imports. - Heavy reliance on remittance funding contributes to external vulnerability. - International reserves at end 2012: US$ 0.7 billion, or only 1.6 months of import cover, well below the 2.7 months of import cover calculated using the reserve adequacy tool. - Structural constraints: limited transport links, distance to markets, and poor business climate raise trading costs and weaken competitiveness. - CPI composition: food share is 58 percent (changes in international food prices have major effects on headline inflation and household food security). - Staff recommendations: - Pursue an ambitious international reserve build-up through greater exchange rate flexibility, as warranted by market conditions. - Convert stocks of non-monetary gold to monetary gold. - Improve transparency and the business climate (even application of the new tax code, consistent enforcement of prudential regulations on banks, rapid implementation of WTO commitments) to support competitiveness and export diversification. - Authorities’ views / actions: - NBT committed to allow greater exchange rate flexibility and indicated conversion of its non-monetary to monetary gold likely to be completed in the second half of this year. - MOF is still considering whether to convert its non-monetary gold and sell it to the NBT. - After WTO entry on March 2, 2013, authorities are assessing tariff rationalization impacts and taking measures to reduce administrative costs; discussions started on transit agreements to facilitate trade through Afghanistan and with South Asia. - Legislation to liberalize the capital account (allowing individuals and businesses to open accounts abroad) is under consideration by parliament. - Authorities partnering with international organizations on projects to enhance private sector competitiveness and investments in energy and infrastructure. - Ongoing tax administration reforms and implementation of the new tax code, which has reduced the number of taxes. ### B. Making Growth Inclusive and Private-Sector Led — diagnosis and reform priorities - Findings: - Growth is strong but not inclusive because current policies do not support domestic job creation. - Domestic and FDI private investments are held back by state-directed lending and investment, displacing private activity and contributing to rent seeking. - Several large banks have weak governance and are expected to lend at preferential rates without regard to profitability (example: AIB). - NBT’s balance sheet and independence have been put at risk by refinancing directed-lending operations and providing liquidity to problem banks. - Financial intermediation remains weak: - Money and bank credit as a share of GDP remain low even by regional standards. - Economy largely cash based; small individual deposits. - Bank loans predominantly short-term, for working capital. - Access to finance for micro, small, and medium enterprises is limited. - Interbank and government securities markets are shallow. - Remittances: over 90 percent of remittances originate from Russia; a slowdown in Russia could significantly reduce remittances and negatively affect debt sustainability and growth. - Labor market: staff estimates indicate that real growth of at least 9 percent is needed just to absorb new entrants into the labor force and stabilize unemployment; official unemployment rate is 2 to 3 percent; alternative sources report unemployment rates in the range of 10 to 40 percent. - Staff recommendations (three areas): 1. Halt directed lending urgently and resolve AIB properly: - Bring in international managers to run AIB to establish accountability, improve governance, and protect value. 2. Develop interbank and government debt markets: - Increase the range of T-bill maturities beyond 91 days. - Allow price discovery (current 2 percent rate on T-bills does not reflect appropriate market pricing and rates will have to rise). - Development of short-term government securities markets would provide better collateral for NBT liquidity support and strengthen monetary transmission. 3. Strengthen central bank independence, bank supervision, and align regulatory standards to international practices: - Consider additional risk weighting for large exposure to government and government entities. - Stop regulatory forbearance and apply prudential norms equitably across banks. - Authorities’ views: - Agreed that a more market-based financial sector would spur private sector development. - Noted need for microfinance institutions and savings institutions (pension and insurance funds) to support SME and infrastructure investments. - NBT emphasized the urgent need for development of the government securities market and other risk-hedging instruments. - Authorities agreed on better coordination between NBT and MOF to strengthen supervision and regulatory practices. - NBT publicly expressed willingness to consider foreign management for AIB as part of a resolution strategy, but there is no support from the broader economic team. ### C. Reducing Fiscal Vulnerability and Strengthening Public Sector Governance — risks and policy measures - Findings: - Government deposits are just 15 percent of revenues—less than half the level of the pre-crisis period. - Amortization of foreign debt is increasing sharply and, absent buffer-building measures, would lead to full depletion of the deposit buffer over the next two years. - SOEs are not well integrated into the budget (no requirement to pay dividends; uneven reporting); many exhibit poor financial discipline (high arrears, including on taxes). - Talco Management (TM) audit (late 2011) indicates substantial untaxed profits held offshore; little is known or reported about these assets. - Staff recommendations: - Retain a zero limit on contracting or guaranteeing new external non-concessional debt, at least in the near term. - Including remittances in the DSA threshold analysis—consistent with new LIC DSA guidelines—moves Tajikistan from high to moderate risk of debt distress; nevertheless, the country remains vulnerable to shocks on non-debt creating flows (official and private transfers and FDI). - Gradually move to small fiscal surpluses to stabilize public debt relative to GDP and keep fiscal deficits within limited financing envelopes. - One-off sale of MOF non-monetary gold to the NBT would boost liquid fiscal buffers and could help support international reserves. - Gradually increase the domestic borrowing envelope to support cash management and finance needed social and infrastructure spending through the budget, limiting pressure for quasi-fiscal operations and directed lending. - Strengthen the large taxpayer inspectorate (LTI) and implement a dividends policy for all SOEs—including Talco Management (TM)—to support tax collection and new tax code implementation. - Strengthen the SOE monitoring unit, bring more SOEs (including TM) under oversight, and develop a concrete plan to address fiscal risks emerging from SOEs and problem banks. - Authorities’ views: - Acknowledge need for continued prudent fiscal management and rebuilding fiscal buffers; accept tight fiscal stance to create room to service debt. - Highlight pressing social expenditure needs and low level of capital spending in the social sector. - MOF favors concessional external borrowing and will continue to pursue it as it offers more favorable terms than t-bill issuance at domestic market rates. - Authorities are considering a dividends policy for SOEs but do not have consensus to include TM in MOF’s SOE monitoring division, to apply a dividends policy to TM, or to create greater transparency around TM’s financial flows. - Tax Committee is developing new criteria for inclusion in the LTU and an arrears management strategy to support the new tax code. ### Staff appraisal — summary of risks and priorities - Outlook and risks: - Tajikistan is weathering global stresses relatively well but remains highly vulnerable to shocks; medium-term growth likely to slow due to modest pace of structural reforms. - Heavy reliance on remittances from Russia and movements in international commodity prices create substantial risks. - Regional factors, remote location, and high transportation costs complicate the environment. - Early reports of substantial hydrocarbon discoveries may require reassessment of the outlook in coming years. - Fiscal and monetary policy priorities: - Reassess medium-term fiscal objectives post-crisis with emphasis on rebuilding fiscal buffers. - Authorities’ plan to move the fiscal position (excluding PIP) over the medium term from small deficits to balance is welcome; small surpluses likely due to conservative budgeting. - Strengthen tax administration to support revenues amid sharply higher external debt service. - Strengthen fiscal buffers via dividends policy for SOEs, sale of MOF non-monetary gold to NBT, collection on bad loans purchased from AIB, and re-privatization over the medium term of the government’s share in AIB. - Authorities’ intention to seek only concessional external financing is welcome; public debt stands at just 32 percent of GDP and risk of debt distress improved to moderate with remittances included in the updated LIC DSA. - Debt vulnerability remains: directed lending and unreformed SOEs periodically increase debt; a standard shock to non-debt creating flows (mostly remittances) is assessed to breach debt thresholds. - Debt sustainability depends critically on government decisions regarding the Roghun dam and financing terms for the remainder of that project. - Social protection and transparency: - Protecting the poor is a priority; avoid blanket subsidies. - Procurement of food and fuel for strategic reserves should be fiscal operations rather than directed lending through banks. - Authorities encouraged to cooperate with the World Bank and donors to develop more effective, targeted assistance to the poor. - Halt directed lending of all types and consider setting aside fiscal contingency funds in the budget consistent with deficits that yield gradual fiscal consolidation. - Monetary and exchange rate policy: - Monetary policy should continue to focus on containing inflation; NBT policy stance supportive of low inflation. - Reserve money targets are consistent with single-digit inflation; interest rates on liquidity lending set to prevailing market levels; NBT mindful to extend liquidity loans only to solvent banks and against good collateral. - Exchange rate policy needs flexibility to strengthen reserves and competitiveness in face of potential adverse terms-of-trade movements or remittance shocks. - NBT’s readiness to allow greater exchange rate flexibility while smoothing excess volatility is welcome, as is its decision to convert non-monetary gold into monetary gold in 2013. - Accession to WTO should support competitiveness and trade integration and the authorities’ initiatives to diversify markets, products, market access, and reduce administrative costs. *Source: Box 2. Tajikistan: Risk Assessment Matrix* ### 32. A comprehensive and well-sequenced effort is needed to address financial sector ### A comprehensive and well-sequenced effort is needed to address financial sector vulnerabilities and limit the emergence of new fiscal liabilities ### Financial sector vulnerabilities and required actions - Findings: - The financial sector remains underdeveloped due to weak governance and the lack of effort to develop government debt markets. - Progress is being made on payments system strengthening, collateral registration system reform, and a first private credit reporting bureau is now operational. - The lack of aggressive action to date on AIB is protecting the vested interests of existing private shareholders and forfeiting the opportunity to minimize the fiscal cost of the intervention in the bank. - The lost opportunity to strengthen financial accountability also weighs on the development of the interbank market. - The MOF’s reluctance to develop the government debt market—due to its concern about the potential cost of servicing domestic debt— is preventing the creation of instruments to strengthen the monetary policy framework, limiting Tajikistan’s ability to deal with shocks, and creating rollover risks. - Policy recommendations: - Pursue a decisive resolution of AIB by hiring foreign managers to strengthen governance and protect the value of the bank. - Complement AIB resolution with strict NBT enforcement of prudential norms across all banks. - Halt directed lending to protect the financial sector. ### Structural reforms: governance, transparency, and market orientation - Findings: - Progress under the 2009–12 ECF-supported program on transparency of state enterprises and government operations is laudable. - The overhaul of the tax regime has potential benefits in boosting revenue and creating a more open business environment. - The establishment of the SOE monitoring unit in the MOF is positive. - Further progress on transparency around SOEs and in public financial management is needed and is likely to be slow. - Policy recommendations: - Move forward quickly with the adoption of a dividends policy for SOEs. - Publish the 2008–10 audits of the Roghun HPP open joint stock company and continue this practice. - Include Talco Management (TM) in the SOE monitoring unit at the MOF. - Apply a possible future dividends policy for SOEs to TM and create greater transparency around TM’s financial flows to strengthen public financial management and bolster revenues and fiscal buffers. - Continue timely implementation of the FATF-approved action plan on AML/CFT and strengthen compliance with FATF standards, notably with respect to the terrorist-financing offense, confiscation, freezing of terrorist assets, and customer due diligence. ### Data provision and technical assistance - Findings: - Data provision to the Fund for surveillance purposes is broadly adequate. - Tajikistan participates in the GDDS and, while there are some weaknesses, data provision is broadly adequate for surveillance. - Recommendations: - Further technical assistance from the IMF would be helpful to improve national accounts, balance of payments, and external debt data. *Source: IMF country document content.* ### 35. Staff recommends that the next Article IV consultation with Tajikistan be held on the regular ### 35. Staff recommends that the next Article IV consultation with Tajikistan be held on the regular 12-month cycle. ### Economic developments and regional comparison - Tajikistan is the poorest CIS country in the region. - Growth was relatively stable in the past years. - GDP growth crucially depends on developments in Russia. - Headline inflation rates in line with regional developments. - Current account balance relatively stable. - Key policy rates have been lowered in most neighboring countries. - Selected comparative figures and charts (as presented): - 2012 GDP per Capita (in U.S. dollars) plotted for TJ, KAZ, KGZ, GZ, UZB (visual). - Central Asia GDP Growth (In percent, year-on-year) series for 2009–2012 prelim. - GDP Growth (In percent, year-on-year) series including TJK, RUS, CHN. - Central Asia CPI (In percent, year-on-year) Mar-10 to Mar-13 for TJK, KAZ, KGZ, UZB. - Cross Country Current Account Balance (Percent of GDP) 2009–2012 prelim. - Central Asia Key Monetary Policy Rates (In percent) Mar-10 to Mar-13 for TJ, KAZ, KGZ, GZ, UZB. ### Monetary developments - The exchange rate vs. the USD has been relatively stable the past 12 months. - The REER appreciated slightly this year. - Headline and core inflation rates remain close. - Remittances keep on growing. - International reserves grow at a slow pace. - Private Credit is affected by AIB resolution in 2012. - Selected indicators and series (as presented): - Somoni/US$ and Somoni/Ruble (RHS) series Mar-10 to Mar-13. - REER & NEER (2005=100) series Mar-10 to Mar-13. - Overall CPI (y/y) and Core CPI (Period Average, y/y) Mar-10 to Mar-13. - Remittances (In percent, year-on-year) Dec-09 to Dec-12. - Reserve Money, Private Credit, Broad Money (In percent, year-on-year) Dec-09 to Dec-12. - International Reserves Position (NIR, GIR) in millions of U.S. dollars Dec-09 to Dec-12. ### Financial and fiscal developments - Profitability of financial sector remains problematic. - Classified loans increased in 2012 despite strong economic growth. - Fiscal position including PIP is close to balance. - Domestic debt is only small part of total government debt. - Central Bank's NDA reflected massive end-year sterilization and an increase in net credit to government. - Inward remittances largely explain imports. - Central Bank Net Domestic Assets (percent change relative to December 2010) showing large movements: e.g., -38, -13, 12, 37, 62, 87 at Jan-11, Aug-11, Mar-12, Oct-12 respectively. - Monthly remittances (percent, y/y) and Imports (percent, y/y) series show correlation Dec-09 to Dec-12. ### Key macro-fiscal projections and indicators (Table 1: Selected Economic Indicators, 2010–18) - Real GDP: 2010 6.5, 2011 7.4, 2012 7.5, 2013 6.8, 2014 5.8, 2015 5.8, 2016 5.8, 2017 5.8, 2018 5.8 - GDP deflator (cumulative): 2010 12.5, 2011 13.3, 2012 11.9, 2013 8.0, 2014 7.0, 2015 7.0, 2016 7.0, 2017 7.0, 2018 6.0 - Headline CPI inflation (end-of-period): 2010 9.8, 2011 9.3, 2012 6.4, 2013 7.0, 2014 7.0, 2015 7.0, 2016 7.0, 2017 7.0, 2018 6.0 - Investment (percent of GDP): 2010 17.9, 2011 20.5, 2012 17.5, 2013 18.5, 2014 17.1, 2015 17.6, 2016 17.4, 2017 18.4, 2018 20.9 - Gross national savings (percent of GDP): 2010 16.7, 2011 15.8, 2012 16.2, 2013 16.8, 2014 14.9, 2015 15.2, 2016 15.1, 2017 16.2, 2018 18.8 - Revenue and grants (percent of GDP): 2010 23.2, 2011 24.9, 2012 25.1, 2013 26.1, 2014 24.9, 2015 24.6, 2016 25.0, 2017 25.2, 2018 25.9 - Expenditure and net lending (percent of GDP): 2010 26.9, 2011 26.9, 2012 24.5, 2013 28.4, 2014 26.2, 2015 25.6, 2016 26.5, 2017 27.1, 2018 28.7 - Overall balance (incl. PIP and stat. discrepancy) (percent of GDP): 2010 -3.7, 2011 -2.0, 2012 0.7, 2013 -2.3, 2014 -1.3, 2015 -1.0, 2016 -1.4, 2017 -1.9, 2018 -2.7 - Total public and publicly-guaranteed debt (percent of GDP): 2010 36.3, 2011 35.4, 2012 32.3, 2013 30.7, 2014 31.4, 2015 31.0, 2016 31.2, 2017 31.8, 2018 31.5 - Broad money (12-month percent change): 2010 25.4, 2011 46.8, 2012 15.5, 2013 18.1, 2014 17.4, 2015 17.5, 2016 16.7, 2017 16.5, 2018 15.6 - Credit to private sector (12-month percent change): 2010 -25.7, 2011 23.9, 2012 8.9, 2013 17.2, 2014 16.9, 2015 16.2, 2016 14.8, 2017 14.7, 2018 14.4 - Current account balance (percent of GDP): 2010 -1.2, 2011 -4.7, 2012 -1.3, 2013 -1.7, 2014 -2.2, 2015 -2.4, 2016 -2.4, 2017 -2.2, 2018 -2.1 - Exports of goods and services (U.S. dollar, percent change): 2010 14.6, 2011 34.5, 2012 18.9, 2013 4.2, 2014 6.7, 2015 7.1, 2016 6.8, 2017 7.6, 2018 9.3 - Imports of goods and services (U.S. dollar, percent change): 2010 9.4, 2011 47.6, 2012 11.7, 2013 1.3, 2014 8.6, 2015 6.9, 2016 8.4, 2017 8.4, 2018 8.9 - Exports of goods and services (millions of U.S. dollars): 2010 866, 2011 1,164, 2012 1,384, 2013 1,443, 2014 1,540, 2015 1,650, 2016 1,761, 2017 1,895, 2018 2,072 - Imports of goods and services (millions of U.S. dollars): 2010 2,968, 2011 4,382, 2012 4,894, 2013 5,449, 2014 5,918, 2015 6,326, 2016 6,855, 2017 7,431, 2018 8,093 - Current account balance (in millions of U.S. dollars): 2010 -69, 2011 -307, 2012 -99, 2013 -145, 2014 -207, 2015 -236, 2016 -257, 2017 -266, 2018 -273 - Gross official reserves (in millions of U.S. dollars): 2010 476, 2011 572, 2012 699, 2013 935, 2014 1,075, 2015 1,245, 2016 1,415, 2017 1,540, 2018 1,680 - Memorandum: Nominal GDP (in millions of somoni): 2010 24,705; 2011 30,069; 2012 36,161; 2013 41,690; 2014 47,153; 2015 53,331; 2016 60,319; 2017 68,223; 2018 76,474 - Memorandum: Nominal GDP (in millions of U.S. dollars): 2010 5,642; 2011 6,523; 2012 7,592; 2013 8,537; 2014 9,221; 2015 10,028; 2016 10,956; 2017 11,994; 2018 13,079 ### General government operations (Tables 2–4 highlights) - Overall revenues and grants (millions of somoni): 2010 5,722; 2011 7,483; 2012 9,089; 2013 10,884; 2014 11,763 (proj.) - Total revenues (millions of somoni): 2010 5,153; 2011 6,792; 2012 8,546; 2013 9,611; 2014 10,993 (proj.) - Tax revenues (millions of somoni): 2010 4,436; 2011 5,833; 2012 7,163; 2013 8,192; 2014 9,387 (proj.) - VAT (millions of somoni): 2010 1,823; 2011 2,511; 2012 3,056; 2013 3,569; 2014 4,106 (proj.) - Total expenditures and net lending (millions of somoni): 2010 6,457; 2011 8,127; 2012 8,890; 2013 11,852; 2014 12,374 (proj.) - Capital expenditures (millions of somoni): 2010 2,693; 2011 3,756; 2012 3,240; 2013 4,277; 2014 3,928 (proj.) - Overall balance (incl. PIP) (millions of somoni): 2010 -920; 2011 -621; 2012 223; 2013 -968; 2014 -611 (proj.) - Net external financing (millions of somoni): 2010 1,020; 2011 769; 2012 108; 2013 450; 2014 302 (proj.) - Recapitalization bonds–commercial banks (millions of somoni, memorandum): 2010 353; 2011 ...; 2012 120; 2013 160; 2014 140 (proj.) ### Central bank and monetary accounts (Tables 4–5 highlights) - Net foreign assets (millions of somoni, end-period): Dec-10 1,251; Dec-11 1,788; Dec-12 2,354; Dec-13 3,222; Dec-14 4,117; Dec-15 5,249 (proj.) - Net international reserves (millions of somoni): Dec-10 1,134; Dec-11 1,815; Dec-12 2,433; Dec-13 3,569; Dec-14 4,427; Dec-15 5,516 (proj.) - Reserve money (end-period, millions of somoni): Dec-10 2,990; Dec-11 3,823; Dec-12 4,530; Dec-13 5,279; Dec-14 6,147; Dec-15 7,113 (proj.) - Broad money (end-period, millions of somoni, excl. bills payable): Dec-10 5,078; Dec-11 7,406; Dec-12 8,524; Dec-13 10,064; Dec-14 11,811; Dec-15 13,880 (proj.) - Credit to the private sector (millions of somoni, end-period): Dec-10 3,291; Dec-11 4,080; Dec-12 4,443; Dec-13 5,206; Dec-14 6,087; Dec-15 7,070 (proj.) - Deposit dollarization (in percent): 61.9 in 2010; 62.5 in 2011. ### Balance of payments and external sector (Table 6 highlights) - Current account (in millions of U.S. dollars): 2010 -69; 2011 -253; 2012 -307; 2013 -99; 2014 -145; 2015 -207; 2016 -236; 2017 -257; 2018 -266 (proj.) - Balance on goods and services (in millions of U.S. dollars): 2010 -2,103; 2011 -2,601; 2012 -3,217; 2013 -3,510; 2014 -4,006; 2015 -4,378; 2016 -4,676; 2017 -5,094; 2018 -5,535 - Migrants' remittances, net (in millions of U.S. dollars): 2010 2,040; 2011 2,293; 2012 2,627; 2013 3,353; 2014 3,804; 2015 4,147; 2016 4,425; 2017 4,829; 2018 5,270 - Gross reserves (in millions of U.S. dollars): 2010 476; 2011 557; 2012 572; 2013 699; 2014 935; 2015 1,075; 2016 1,245; 2017 1,415; 2018 1,540 - Total PPG external debt (in millions of U.S. dollars): 2010 1,911; 2011 2,260; 2012 2,094; 2013 2,150; 2014 2,248; 2015 2,501; 2016 2,698; 2017 2,954; 2018 3,281 ### Financial soundness indicators (Table 7 highlights) - Tier I capital as percent of risk-weighted assets: 2010 24.5; Mar-11 20.3; Jun-11 18.9; Sep-11 19.3; Dec-11 21.3; Mar-12 22.1; Jun-12 24.3; Sep-12 25.4; Dec-12 23.3 - Reported total capital to risk-weighted assets (K1-1): 2010 26.3; Mar-11 23.2; Jun-11 22.8; Sep-11 23.7; Dec-11 24.4; Mar-12 24.3; Jun-12 27.3; Sep-12 27.2; Dec-12 25.9 - Nonperforming loans to gross loans: 2010 17.2; Mar-11 16.6; Jun-11 16.4; Sep-11 17.0; Dec-11 14.1; Mar-12 18.5; Jun-12 16.4; Sep-12 17.3; Dec-12 18.2 - Reported return on assets (ROA): 2010 0.8; Mar-11 0.9; Jun-11 0.9; Sep-11 0.1; Dec-11 -0.4; Mar-12 1.6; Jun-12 1.5; Sep-12 1.6; Dec-12 0.2 *Source: IMF staff report material for the Republic of Tajikistan (selected figures, tables, and text provided in the document).* ### 0.33 short 6.2 lon 4 long4.7 long3.2 short0.5 long1.9 long6.8 long0.7 short ### 1tjkea2021001 - 0.33 short 6.2 lon 4 long4.7 long3.2 short0.5 long1.9 long6.8 long0.7 short ### Competitiveness and Real Effective Exchange Rate (REER) - The somoni has appreciated in recent months and remains around historical averages. - Pre-GFC period: somoni appreciated by 20 percent in real effective terms following a spike in domestic inflation. - Since the GFC: appreciation of trading partners’ currencies and a decline in domestic inflation led to a real depreciation. - Recent REER movement: appreciated in recent months and remains slightly below the past ten-year average. - CGER-type methodologies (simple average of three approaches) give an overvaluation of 0.3 percent, within the standard forecast error. - Range of individual estimates: undervaluation of 5.5 percent to an overvaluation of 3.6 percent; all estimates remain within the standard forecast error. - Cross-country: Tajikistan’s REER has remained below CCA peers (except Uzbekistan) over the past half decade; more recently trended up towards peers and away from Uzbekistan. - World Bank Doing Business ranking: declined from 133 in 2007 to 141 in 2012. - Tajikistan became the 159th WTO member on March 2, 2013. ### External Vulnerability and Reserves - Gross reserves: currently US$ 0.7 billion (covering 1.6 months of imports). - Expected reserves by end-2013: about US$ 1 billion (covering 1.9 months of imports). - Drivers of expected increase: steady increase in inward remittances, stable food and fuel price outlook, conversion of NBT’s non-monetary gold into monetary gold. - Remittances act as a buffer but do not secure reserve position. - Tajikistan scores lowest among CCA peers on reserves coverage of next year's imports. - New reserve metric suggests appropriate level of reserves: 2.7 months of imports (with cost of holding reserves at 2 percent), significantly higher than current level (1.6 months). - Policy suggestions: - Allow exchange rate flexibility together with warranted macroeconomic policy adjustment to build near-term buffers. - Invest in structural reforms to diversify economy and broaden export base for long-term resilience. - Interim strategy: accumulate hard currency by converting non-monetary gold to monetary gold. ### External Sector Structure and Remittances - Exports of Goods and Services 2012 (percent of GDP): shown peer values include 65, 53, 52, 48, 38, 28, 21, 18 (peers listed: TKM KGZ AZE KAZ GEO UZB ARM TJK). - Remittances, imports, and reserves time series presented for 2005–2012 with remittances and imports in USD billions and reserves in months of imports. - Remittances provide limited buffering; export base is narrow. ### Financial System – Issues and Options - Financial system characteristics: - Largely closed, mostly bank-based; capital markets and access to global financing limited. - Commercial banks account for over 87 percent of total assets. - Microfinance organizations account for 10 percent of assets; negligible NBFIs; virtually non-existent securities market. - Confidence and dollarization: - Economy operates largely with cash; large informal economy. - Formal intermediation heavily relies on foreign currency. - Interbank market underdeveloped; banks rely on NBT emergency liquidity support (trend down after 2012 AIB rescue). - Depth indicators: - Over 50 percent of system-wide deposits concentrated in some large banks. - 2012 banking system ROA: 0.2 percent (mainly driven by losses at AIB). - One-day plus overdue loans amounting to 18.2 percent of total loans outstanding. - System-wide capital adequacy: 23.3 percent (masks vulnerability in large banks). - Market shares (by assets, September 2012): Non-Resident Banks 9%, Public Bank 14%, Resident Private Banks 77%. - Structural problems reinforcing weakness: directed/preferential lending, weak loan repayment culture, weak enforcement of prudential regulations. - Banking sector vulnerabilities: - High lending-deposit spreads. - Elevated and rising NPLs. - Dependence on non-productive remittance financing; most deposits in FX and credit growth skewed towards FX. - Options and recommended actions: - Halt the practice of directed lending. - Resolve AIB to establish financial accountability and improve governance. - Strengthen bank supervision and stop regulatory forbearance; apply prudential norms equally across banks. - Develop interbank and government debt markets. - Consider expanding financing base beyond banks by leveraging technological advances to expand financial access. - Deepen domestic financial markets to support issuance of treasury bills. ### Medium-Term Fiscal Framework (MTFF) - Fiscal history and deposits: - 2009–2010: fiscal deficits as countercyclical response to global crisis; partially financed from government deposits accumulated during previous surplus years. - Recent reversal: returning to fiscal surpluses in past two years has reversed draw-down of deposits. - Deposit buffer: depleted to half of pre-crisis period, standing at 15 percent of revenues. - External debt amortization: - Starting in 2012, amortization of foreign debt has sharply increased, creating debt management challenges. - Projected fiscal stance: - Fiscal position expected to tighten after 2013 to raise resources to service foreign obligations while accommodating social and capital spending. - Budget excluding externally financed PIPs envisages a surplus of at least 0.4 percent of GDP in the medium term. - Under the baseline, accumulated deposit buffer will be fully depleted over the next two years as debt amortization outpaces fiscal surplus. - Additional fiscal buffers may be needed to cover contingent liabilities. - Policy recommendations to rebuild buffers: - Sales of MOF’s non-monetary gold to the NBT. - Implement a dividends policy requiring large SOEs to pay regular dividends to the budget. - Raise domestic financing through issuance of treasury bills. - Deepen domestic financial markets and improve tax administration and SOE financial discipline. - Tax arrears: as of end-September 2012, total tax arrears amounted to 12 percent of total tax revenues, of which 40 percent related to large SOEs. ### Debt Sustainability Analysis (DSA) and Risk Assessment - DSA coverage: External low income country (LIC) debt sustainability analysis jointly produced by World Bank and IMF staff (with ADB consultation). - Risk of debt distress: assessed to be moderate. - Role of remittances: Including remittances in the DSA threshold analysis moves Tajikistan from high to moderate risk of debt distress (consistent with Joint Bank-Fund Staff Guidance Note on use of remittances in the DSF for LICs). - Vulnerabilities: - Remain vulnerable to shocks on non-debt creating flows. - Public DSA stress tests show sensitivity of fiscal position to a slightly lower long-run growth rate. - Policy implications from DSA: - Continue planned fiscal consolidation. - Exercise caution in contracting and guaranteeing new debt, particularly non-concessional debt. - Carefully assess costs and benefits of large-scale investment projects. - Improve coordination between fiscal and monetary authorities to identify and limit quasi-fiscal activities that can generate unexpected fiscal costs and public debt. - Implement growth-enhancing structural reforms. *Source: IMF and World Bank staff report content as provided in the source PDF.* ### 1. Tajikistan’s reported public debt stock has declined significantly over the past decade, but ### 1. Tajikistan’s reported public debt stock has declined significantly over the past decade, but the country remains vulnerable to external and growth shocks ### Key findings on debt levels and composition - Public debt stock declined from about 90 percent of GDP in 2002 to 32.3 percent of GDP in 2012. - Most of the debt is denominated in foreign currency—around 28.3 percent of GDP in 2012. - Domestic public debt stood at 4 percent of GDP (12 percent of total public debt) at end-2012. - Domestic debt consists mostly of non-tradable government securities held by the National Bank of Tajikistan (NBT). - Total issuance of T-bills in 2012 (excluding issuances for the AIB resolution and NBT recapitalization) was 0.21 percent of GDP based on auction amounts. - A government bailout of Agroinvestbank (AIB) in 2012 contributed about 2 percent of GDP to the domestic-debt stock. - Public and publicly guaranteed (PPG) external debt at end-2012 was estimated at 28.3 percent of GDP (better than the 33.3 percent projection in the last DSA). - PPG external debt is largely concessional, denominated in foreign currency, and broadly split between multilateral and bilateral creditors. - The share of China in PPG external debt is about 41.1 percent (information provided by the country authorities). - Private external debt was 18.3 percent of GDP in 2012 and projected to decrease to 17.9 percent of GDP in 2013. - Total external debt: 46.6 percent of GDP in 2012 and 44.9 percent of GDP forecast for 2013. - Total external debt (billion US dollars) 2012: 3.5; 2013: 3.8. - PPG debt (billion US dollars) 2012: 2.2; 2013: 2.2. - Private debt (billion US dollars) 2012: 1.4; 2013: 1.5. - Total domestic public debt (billion US dollars) 2012: 0.3; 2013: 0.3. ### Remittances and incorporation into the DSA - Remittance inflows are a dominant source of foreign exchange: - Equivalent to 48 percent of GDP and 261 percent of exports of goods and services in 2012 (noting elsewhere in the document migrants’ remittances were equivalent to 47½ percent of GDP in 2012). - The DSA incorporates remittances in debt-burden indicators and applies remittance-adjusted thresholds: - Remittance-adjusted thresholds for Tajikistan are 80 and 27 for the PV of debt to exports and GDP (previously 100 and 30 without remittances). - For debt service, the remittance-adjusted threshold is lowered to 12 percent of exports (previously around 15 percent without remittances). - Thresholds for PV of debt-to-revenues and debt service–to-revenues remain unchanged at 200 and 18 percent, respectively. - Inclusion of remittances leads to reclassification of risk of debt distress from high to moderate in the current DSA. ### Macroeconomic assumptions underlying projections (Box 1) - Real GDP growth: - Projected at 6¾ percent in 2013. - Projected at 5¾ percent over the medium and long term. - Ten-year historical average (2003–12): 7½ percent. - U.S. dollar GDP deflator: - Projected to decrease to 5¼ percent in 2013 from 8¼ percent in 2012. - Projected to continue decelerating to about 3¾ percent through 2033. - Historical average noted as 12 percent with exceptional volatility; previous DSA used 8¼ percent over medium term. - External current account deficit: stays in the range of 1¾-2½ percent of GDP over the medium term. - Migrants’ remittances: - Equivalent to 47½ percent of GDP in 2012. - Expected to grow at 9¼ percent over the medium term and 9 percent over the long term. - Ten-year historical average growth (2003-12): 66 percent. - Reserve coverage: projected to build to about 2¼ months of imports by 2018 and to about 2¾ months of imports over the long run. - Fiscal balance (excluding externally-financed PIP): - Likely to loosen in 2013 relative to 2012 outcome but consistent with medium-term debt sustainability. - Path reflects a more gradual pace of consolidation relative to the previous DSA; real primary spending growth expected to stay the same as the past ten year average. - Real interest rates: for domestic debt, projected to become positive and rise very gradually from 2014. - Financing composition projected over medium and long term: external and domestic PPG debt about 87 percent and 13 percent, respectively, of total public debt. - Share of domestic PPG debt expected to be higher than ten-year historical average of 5 percent of total public debt (2003-12). - External PPG expected to be largely concessional and denominated in foreign currency; external borrowing on concessional terms for Roghun HPP is incorporated as unidentified financing. ### DSA results, scenarios, and stress tests - Baseline scenario (including remittances): - All external debt burden indicators remain below debt burden thresholds. - External debt stock and external debt service ratios expected to stay below thresholds over the entire period and follow a gradual downward trajectory over the medium term and steady over the long term. - Debt service payments manageable, with a gradual increase when principal payments on loans from China fall due (starting from 2012). - Historical scenario: - Deemed not relevant; combination of steady high GDP growth of 7.5 percent and persistent high inflation of 12.1 percent is unlikely. - Standard stress tests: - One-standard-deviation shortfall in non-debt creating flows (official and private transfers including remittances, and FDI) creates prolonged breaches in debt stock ratios (PV of debt-to-GDP + remittances, PV of debt-to-exports + remittances, and PV of debt-to-revenues). - Non-debt creating flows composition in 2012: remittances 92 percent, official transfers 3 percent, FDI 5 percent. - Breaches indicate vulnerability to remittance-led growth deviations and the need to broaden revenue and export bases. - Public DSA: - PV of public debt-to-GDP ratio projected to decline gradually over the medium term and remain stable over the long term under baseline. - PV of public debt-to-revenues in current DSA projected to be lower by 20-30 percent relative to the previous DSA, reflecting improved fiscal outturns (improved revenues and lower expenditures). - Standard stress tests show vulnerabilities to permanently lower GDP growth and to higher other debt-creating flows (simulated as a 10 percent of GDP increase in other debt-creating flows in 2014). - The 10 percent of GDP stress is conservative relative to recent realized quasi-fiscal costs estimated at 2-4 percent of GDP in total over a period of four years. ### Policy implications and recommendations - Maintain caution in contracting and guaranteeing new debt, particularly non-concessional borrowing. - Carefully vet cost-benefit analyses of large-scale infrastructure projects. - Continue fiscal consolidation and measures to minimize fiscal risks. - Broaden the revenue and export bases through diversification and structural reforms (e.g., implementation of a dividends policy for SOEs). - Halt the practice of directed lending to limit contingent fiscal liabilities and protect the health of banks. - Strengthen debt management capacity by: - Closely monitoring debts of state-owned enterprises (SOEs). - Completing an assessment of, and a plan to address, potential fiscal risks emerging from SOEs and banks (in line with IMF TA recommendations). *REPUBLIC OF TAJIKISTAN — INTERNATIONAL MONETARY FUND* ### 16. The authorities concurred with the conclusions of the DSA exercise. They agreed with staff’s ### 16. The authorities concurred with the conclusions of the DSA exercise. They agreed with staff’s ### Authorities' conclusions and policy advice - The authorities concurred with the conclusions of the DSA exercise. - Agreed policy advice: - Exercise caution over contracting and guaranteeing new debt on non-concessional terms given existing vulnerabilities and limited buffers. - Build greater fiscal buffers. - Increase coordination between the Ministry of Finance and the central bank (NBT) to identify and limit quasi-fiscal activities that ultimately generate unexpected fiscal costs and debt obligations. ### Key DSA findings and risk indicators (selected) - The DSA presents indicators of Public and Publicly Guaranteed (PPG) external debt under alternative scenarios for 2013–2033, including: - Debt accumulation, grant-equivalent financing (% of GDP), and grant element of new borrowing (percent, right scale). - PV of debt-to-GDP+remittances ratio; PV of debt-to-exports+remittances ratio; PV of debt-to-revenue ratio. - Debt service-to-exports+remittances ratio and debt service-to-revenue ratio. - The most extreme stress test is defined as the test that yields the highest ratio in 2023; in multiple panels it corresponds to a Non-debt flows shock. ### Selected baseline projections and metrics (Table 1: External Debt Sustainability Framework, Baseline, Scenario, 2010–2033) - External debt (nominal) 2013: 51.4; 2018: 45.8; 2023 Average: 43.9; 2033 Average: 40.6 (in percent of GDP) - Public and publicly guaranteed (PPG) external debt (percent of GDP) 2013: 34.1; 2018: 27.4; 2023 Average: 26.3; 2033 Average: 23.5 - Change in external debt (percent of GDP): 2013: -2.5; 2018: 0.3; 2023 Average: -0.3; 2033 Average: 0.0 - Identified net debt-creating flows (percent of GDP): historical average 2013-2018: -5.4; 2019-2033 average: -2.7; 2023 average: -3.3; 2033 average: -2.6 - Non-interest current account deficit (percent of GDP): 2013: 0.4; 2018: 0.8; 2023 average: 1.1; 2033 average: 1.1 - Exports (percent of GDP): 2013: 15.3; 2018: 16.1; 2023 average: 15.8; 2033 average: 15.0 - Imports (percent of GDP): 2013: 52.6; 2018: 62.6; 2023 average: 61.9; 2033 average: 59.8 - Net FDI (negative = inflow, percent of GDP): 2013: -0.3; 2018: -2.4; 2023 average: -3.0; 2033 average: -3.0 - PV of external debt (percent of GDP) 2023: 37.7; 2033: 33.2 - PV of PPG external debt (percent of GDP) 2023: 19.5; 2033: 16.1 - PV of PPG external debt (in percent of exports) 2023: 106.8; 2033: 105.3 - PV of PPG external debt (in percent of government revenues) 2023: 82.4; 2033: 67.5 - Debt service-to-exports ratio (in percent) historical series include: 2013: 5.6; 2018: 13.7; 2023: 13.6; 2033: 8.1 - PPG debt service-to-revenue ratio (in percent) sample values: 2013: 2.0; 2018: 5.1; 2023: 5.0; 2033: 3.1 - Total gross financing need (Billions of U.S. dollars) across selected years: 2013: 0.1; 2014: 0.2; 2015: 0.0; 2016: 0.1; 2017: 0.1; 2018: 0.1 - Non-interest current account deficit that stabilizes debt ratio (percent of GDP) sample values: 2013: 2.9; 2018: 1.4; 2023: 1.3; 2033: 1.8 ### Key macroeconomic assumptions (Table 1: selected series) - Real GDP growth (in percent): historical and projections include 2013: 6.5; 2018: 5.8; 2023 average: 5.8; 2033 average: 5.8 - GDP deflator in US dollar terms (change in percent): 2013: 6.4; 2018: 2.8; 2023 average: 3.4; 2033 average: 3.7 - Effective interest rate (percent): 2013: 1.8; 2018: 3.0; 2023 average: 2.5; 2033 average: 2.4 - Growth of exports of G&S (US dollar terms, in percent): 2013: 14.6; 2018: 7.1; 2023 average: 9.5; 2033 average: 9.4 - Growth of imports of G&S (US dollar terms, in percent): 2013: 9.4; 2018: 8.4; 2023 average: 10.0; 2033 average: 9.4 - Grant element of new public sector borrowing (in percent): sample values shown include 15.6, 17.0, 17.6, 18.8, 21.1, 23.8, 19.0, 21.8, 22.0 - Government revenues (excluding grants, in percent of GDP): 2013: 20.9; 2018: 23.8; 2023 average: 23.8; 2033 average: 23.8 - Aid flows (in Billions of US dollars) sample series: 2013: 0.1; 2014: 0.1; 2015: 0.1; 2016: 0.3; 2017: 0.2; 2018: 0.1; 2023: 0.2; 2033: 0.5 - Grant-equivalent financing (in percent of GDP, sample): 2023: 3.4; subsequent values include 1.9, 1.7, 1.7, 1.7, 2.4, 2.1, 1.5, 1.8 - Grant-equivalent financing (in percent of external financing) sample values include 65.8, 59.3, 54.0, 62.7, 57.1, 59.5, 50.5, 46.4, 48.4 ### Additional public debt metrics (Public sector debt tables, selected) - Public sector debt (percent of GDP): 2010: 36.3; 2013-18 average: 31.2; 2023: 30.3; 2033: 27.5 - Public sector foreign-currency denominated (percent of GDP): 2010: 34.1; 2013-18 average: 27.4; 2023: 26.3; 2033: 23.5 - Primary deficit (percent of GDP) sample series: 2013-18 averages and projections show values including 0.4, 0.2, 0.6, 1.1, 1.9 - Revenue and grants (percent of GDP): 2013: 23.2; 2018: 25.2; 2023: 25.4; 2033: 24.8 - Primary (noninterest) expenditure (percent of GDP): 2013: 26.0; 2018: 26.3; 2023: 26.9; 2033: 26.1 - Automatic debt dynamics (contribution, percent of GDP) sample values: -4.8, -2.0, -1.8 - Residual, including asset changes (percent of GDP): sample values include 2.9, -0.6, 3.1, -0.8, 1.9, 1.5 - PV of public sector debt (percent of GDP) sample series: 23.5, 22.7, 21.6, 20.8, 19.7, 19.3, 19.0, 20.3, 20.1 - Gross financing need (percent of GDP): sample values include 3.7, 2.1, 3.6, 2.9, 2.5 ### Sensitivity and stress test highlights - Table 1b and Table 2b present sensitivity analyses and bound tests for 2013–2033, including scenarios such as: - A1. New public sector loans on less favorable terms in 2013-2033. - Bound tests: B1. Real GDP growth at historical average minus one standard deviation; B2. Export value growth at historical average minus one standard deviation; B4. Net non-debt creating flows at historical average minus one standard deviation; B6. One-time 30 percent nominal depreciation relative to the baseline in 2014. - Selected stress outcomes (percent indicators shown in tables): - PV of debt-to-GDP+remittances ratio (baseline and alternative scenario values by year are reported across tables). - PV of debt-to-exports+remittances ratio and PV of debt-to-revenue ratio under alternative shocks. - Debt service-to-exports+remittances ratio and debt service-to-revenue ratio under alternative shocks. - Memorandum item in sensitivity tables: Grant element assumed on residual financing (i.e., financing required above baseline) = 19 (percent) across listed years. *Source: Country authorities; and staff estimates and projections.* ### 2004. Metadata is updated regularly. The authorities ### 2004. Metadata is updated regularly. The authorities ### Data dissemination and SDDS interest - The authorities have indicated their interest in graduating from the GDDS to the Fund’s Special Data Dissemination Standard (SDDS). - They have appointed a national SDDS coordinator and requested technical assistance for this purpose. ### Data ROSC - A Data ROSC was published on March 30, 2005. ### Reporting to STA / IFS - Country page in the International Financial Statistics (IFS) has been published since February 2003. ### TAJIKISTAN: TABLE OF COMMON INDICATORS REQUIRED FOR SURVEILLANCE (As of March, 2013) - Date of latest observation / Date received / Frequency of data / Frequency of reporting / Frequency of publication - Exchange Rates: 03/25/2013 03/29/13 D W W - International Reserve Assets and Reserve Liabilities of the Monetary Authorities1: 03/25/13 03/29/13 D W W - Reserve/Base Money: 03/18/13 03/29/13 W M W - Broad Money: 01/31/13 03/16/13 M M M - Central Bank Balance Sheet: 03/18/13 03/29/13 W M W - Consolidated Balance Sheet of the Banking System: 01/31/13 03/15/13 M M M - Interest Rates2: Feb 2013 03/29/13 M M V - Consumer Price Index: Feb 2013 03/28/13 M M M - Revenue, Expenditure, Balance and Composition of Financing3 – General Government4: Jan 2013 03/20/13 M M M - Revenue, Expenditure, Balance and Composition of Financing3 – Central Government: Jan 2013 03/20/13 M M M - Stocks of Central Government and Central Government-Guaranteed Debt5: Q4/2012 02/19/13 Q Q V - External Current Account Balance: Q4 2012 03/30/13 Q Q V - Exports and Imports of Goods and Services: Q4 2012 03/30/13 Q Q V - GDP/GNP: Feb 2013 03/28/2013M/A M V - Gross External Debt: Q4 2012 03/19/13 Q Q V ### Memo Items: Data Quality – Methodological soundness7 - Reserve/Base Money: O, O, LO, O - Consumer Price Index: LO, LO, LNO, O - Revenue, Expenditure, Balance and Composition of Financing – General Government: LO, LO, O, O - Revenue, Expenditure, Balance and Composition of Financing – Central Government: O, O, O, LO, LO - GDP/GNP: O, LNO, LNO, LNO ### Memo Items: Data Quality – Accuracy and reliability8 - Reserve/Base Money: LO, O, O, O, NO - Consumer Price Index: LO, LO, LO, O, O - Revenue, Expenditure, Balance and Composition of Financing – General Government: O, O, O, LO, LO - Revenue, Expenditure, Balance and Composition of Financing – Central Government: LO, LO, LO, O, O - GDP/GNP: LO, LO, LNO, O, O Notes / Footnotes (as provided) - 1 Includes reserve assets pledged or otherwise encumbered as well as net derivative positions. - 2 Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds. - 3 Foreign, domestic bank, and domestic nonbank financing. - 4 The general government consists of the central government (budgetary funds, extrabudgetary funds, and social security funds) and state and local governments. - 5 Including currency and maturity composition. - 6 Daily (D); Weekly (W); Monthly (M); Quarterly (Q); Annually (A); Irregular (I); Not Available (NA). - 7 Reflects the assessment provided in the data ROSC published on April 2005 and based on the findings of the mission that took place during April 2004 for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning (respectively) concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O), largely observed (LO), largely not observed (LNO), or not observed (NO). - 8 Same as footnote 7, except referring to international standards concerning (respectively) source data, statistical techniques, assessment and validation of source data, assessment and validation of intermediate data and statistical outputs, and revision studies. *REPUBLIC OF TAJIKISTAN — INTERNATIONAL MONETARY FUND* --- _Source: https://www.imf.org/-/media/files/publications/cr/2021/english/1tjkea2021001.pdf_