## IMF Staff Completes Virtual Visit to Tajikistan

_IMF News, September 14, 2020_

## Source details

**Canonical URL:** [IMF Staff Completes Virtual Visit to Tajikistan](https://www.imf.org/en/news/articles/2020/09/14/pr20292-tajikistan-imf-staff-completes-virtual-visit)

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## Bibliographic details
- Published: September 14, 2020

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### Mission purpose and timing
- An International Monetary Fund (IMF) mission led by Ms. Padamja Khandelwal visited Tajikistan virtually from August 18 to September 3, 2020.
- Objective: discuss macroeconomic developments, the government’s policy response to the coronavirus shock, and policies to maintain macroeconomic stability and build foundations for strong, sustainable, and inclusive growth.
- End-of-mission press release clarifies: "End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board."

### Economic impact of COVID-19 — findings
- "The health impact of the pandemic has been well-contained, but trade and transportation challenges with key trading partners have affected economic activity and remittances."
- "The external position has deteriorated."
- "On the fiscal side, revenues have dropped sharply, posing challenges for the implementation of the revised budget for 2020."
- The mission notes support from international partners has been mobilized.

### Government response and measures taken
- Fiscal measures:
  - The revised budget incorporates higher allocations for health and social spending and cuts to lower-priority spending.
  - The authorities have implemented temporary tax relief measures.
  - The Targeted Social Assistance program has been expanded nationwide.
  - One-off social transfers to vulnerable households and financial support to SMEs are underway.
  - "Health and social spending are expected to be further stepped up in the second half of the year to alleviate the poverty and social impact of the pandemic."
  - Authorities committed to publish quarterly reports on COVID-related health and social spending.
- Monetary and financial sector measures by the National Bank of Tajikistan (NBT):
  - Easing reserve requirements and lowering the policy rate.
  - Recommendation: "ensuring strong supervision will be important to maintain confidence in bank balance sheets."
  - Recommendation: "An effective fiscal backstop for the Deposit Insurance Fund is recommended and the two formerly systemic and insolvent banks need to be liquidated."
  - Foreign exchange shortages "also need to be addressed."

### Policy recommendations and medium-term priorities
- "Over the medium-term, policies to achieve fiscal and external consolidation, in line with the Rapid Credit Facility (RCF) commitments, remain important to ensure macroeconomic stability."
- Address the large decline in revenues in 2020 to build fiscal space for needed spending on health, education, and infrastructure.
- Tax policy:
  - The mission "welcomes the authorities’ commitment to tax reform and urges a gradual and phased revision of the tax code to support the business environment and fiscal consolidation."
- Exchange rate policy:
  - "Greater exchange rate flexibility is needed to strengthen the credibility of the monetary policy framework."
- Governance and transparency:
  - The authorities’ commitment to publish quarterly reports on COVID-related health and social spending is "strongly welcomed."
  - To further strengthen good governance practices, "transparency of borrowing by state-owned enterprises also needs to be enhanced."

### Stakeholder engagement during the visit
- The mission met with:
  - First Deputy Prime Minister D. Said
  - Chairman of the National Bank of Tajikistan, J. Nurmahmadzoda
  - Minister of Finance F. Qahhorzoda
  - Minister of Economy Development and Trade Z. Zavqizoda
  - Other senior officials, representatives of the banking sector, and the development partner community.
- Closing remark from the mission: "The mission would like to thank the authorities for their close cooperation and candid discussions."

*Source: IMF press release dated September 14, 2020.*

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## References

- [IMF COVID-19 Hub](https://www.imf.org/en/Topics/imf-and-covid19)
- [Policy Tracker](https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19)
- [Financial Assistance](https://www.imf.org/en/Topics/imf-and-covid19/COVID-Lending-Tracker)
- [Questions & Answers](https://www.imf.org/en/About/FAQ/imf-response-to-covid-19)
- [Republic of Tajikistan and the IMF](http://www.imf.org/external/country/TJK/index.htm)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2020/09/14/pr20292-tajikistan-imf-staff-completes-virtual-visit_