An International Monetary Fund (IMF) mission, led by Mr. Paul Ross, visited
Dushanbe from May 17−30 to conduct the 2017 Article IV consultation
discussions. At the conclusion of the mission, Mr. Ross issued the
following statement:
“The Tajikistan authorities and the IMF team held constructive discussions
on Tajikistan’s recent economic developments, the economic outlook, and
policy actions and structural reforms needed to support an inclusive growth
agenda. The team commended the authorities for reforms implemented in past
two years and stressed that deeper reforms are needed.
“Since late-2014, Tajikistan’s economy suffered from external shocks, which
affected economic confidence, reduced fiscal space and external buffers,
and increased vulnerabilities. In 2017, with subdued external and domestic
demand, fiscal consolidation and lower credit to the private sector, the
IMF team projects real economic growth to slow, while the authorities
project somewhat higher growth. Strong and sustained reforms are needed to
lift growth over the medium term.
“Tajikistan’s authorities and the IMF team agreed on the importance of
generating inclusive and job-rich growth to increase incomes and reduce
poverty. The authorities and the mission agreed that generating inclusive
growth will require prudent macroeconomic policies to lift economic
confidence in addition to strong and sustained structural reforms.
Regarding macroeconomic policies, Tajikistan’s 2017 budget appropriately
targets a decline in the deficit. The authorities and the IMF team agreed
that the deficit should gradually narrow over the medium term to assure
debt sustainability. Also, the team welcomed the recent efforts to unify
the official and market exchange rates and noted that a flexible exchange
rate policy and supporting monetary policy--with greater sales of National
Bank of Tajikistan (NBT) notes--would control inflation, restore confidence
in the somoni, and help rebuild the reserves buffer.
“Banking reform is critical to reduce macro-financial vulnerabilities,
support economic growth, and financial inclusion. The team supported the
improvements made in banking regulation and supervision, monitoring of
systemic banks’ asset quality and implementing resolution plans for two of
them. Also, it welcomed the increase in financial inclusion. Further, it
urged early action to strengthen the bank resolution and emergency
liquidity assistance frameworks, measures to assure sustainable viability
of the two systemic banks, and to develop strategies to address
non-performing loans and improve transparency in this sector.
“Continued strong structural reform will create job-rich and
poverty-reducing growth. The authorities and the team discussed plans to
advance other structural reforms. The discussions covered fiscal reforms to
improve service delivery and reduce fiscal risks; strengthening the
monetary framework to anchor better inflation and exchange rate
expectations; and improvements in the business environment to foster higher
investment and job creation.
“The authorities indicated they wish to resume discussions on a possible
IMF-supported program. Concrete steps in key reform areas will need to be
taken, building on the efforts already made by the Tajikistan authorities,
to resume program negotiations. These steps include preparing a medium-term
fiscal strategy to assure debt sustainability, an assessment of the
macroeconomic implications (on growth, exports, and debt sustainability) of
large infrastructure projects, and banking reforms. Steps that demonstrate
reform progress would pave the way for resumption of program negotiations,
which will need careful preparation by both the Tajikistan authorities and
IMF staff.
“IMF staff looks forward to continuing its close cooperation with
Tajikistan. IMF staff will engage closely with the Tajikistan authorities
in the weeks ahead to support the efforts of the Government and the NBT to
promote macroeconomic stability and inclusive growth, and stand ready to
resume discussions on an IMF-supported program.
“During the visit, the team met with First Deputy Prime Minister Davlatali
Said, Finance Minister Abdusalom Qurboniyon, Economy Minister Negmatullo
Hikmatullozoda, and NBT Governor Jamshed Nurmahmadzoda, and other senior
officials.”
