{
  "title": "Tajikistan: Staff Concluding Statement for the 2025 Article IV Mission",
  "publication": "IMF News, May 2, 2025",
  "sourceUrl": "https://www.imf.org/en/news/articles/2025/05/02/mcs-tajikistan-staff-concluding-statement-for-the-2025-article-iv-mission",
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  "summary": "An International Monetary Fund (IMF) mission led by Mr. Matthew Gaertner held the 2025 Article IV consultation and discussions on the second review under the Policy Coordination Instrument (PCI) with the Tajikistan authorities during April 2-15, 2025, in Dushanbe.",
  "publishDate": "2025-05-02",
  "sections": [
    {
      "heading": "Economic developments, outlook, and risks",
      "content": "- Real GDP increased 8.4 percent in 2024, marking the fourth consecutive year of growth above 8 percent, driven by mining, manufacturing, agriculture, public and private investment.\n- Current account surplus of 6.2 percent of GDP in 2024.\n- FX reserves rose from $3.6 billion at end-2023 to $4.7 billion at the end of February 2025, amounting to 7 months import coverage.\n- Twelve-month inflation stood at 3.7 percent in February, within the NBT’s updated target range of 5 percent (±2 percent) for 2025; price stability reflected stable imported food and fuel prices and an appreciation of the somoni.\n- Reserve money growth was 32 percent (y/y) in February, moderated since mid-2024 but boosted by the NBT’s gold purchases.\n- Banks’ NPL ratio declined to 7.0 percent in February amid balance sheet clean-up largely via write-offs of legacy NPLs.\n- Credit to the private sector grew at 29 percent (y/y) in February, driven by household loans in local currency and new retail lending products.\n- Medium-term projections and key risks:\n  - Real GDP projected to increase by 7 percent in 2025.\n  - Twelve-month inflation (y/y) projected to remain close to the mid-point of the NBT’s target range in 2025 and 2026.\n  - Current account surplus expected to narrow in 2025 as financial inflows stabilize; FX reserves projected to remain at comfortable levels.\n  - Risks tilted to the downside: potential pronounced decline in financial inflows (remittances), slowdown in key trading partners, more frequent/severe natural disasters, and heightened security risks.\n  - Upside: continued strength in gold prices and rising demand for rare earth metals could attract investment in mining."
    },
    {
      "heading": "Fiscal policy",
      "content": "- Fiscal outcome in 2024: fiscal surplus of 0.3 percent.\n- Revenue performance supported by stable revenue growth despite VAT reduction from 15 to 14 percent.\n- 2025 budget envisages a fiscal deficit of up to 2.5 percent of GDP, conditional on available financing.\n- Public debt declined to 25 percent of GDP at the end of 2024; public debt assessed as sustainable but at high risk of distress due to large debt service obligations during 2025-2027; the first semi-annual Eurobond repayment was completed as planned in March.\n- Key fiscal policy priorities and measures:\n  - Continue to expand the domestic debt market; MOF launched market-based auctions of government securities in 2024.\n  - Maintain fiscal deficit target of 2.5 percent of GDP as an anchor to keep debt on favorable medium-term trajectory.\n  - Build fiscal buffers and prepare contingency plans for spending reprioritization to protect social assistance and other critical spending.\n  - Improve revenue mobilization and spending efficiency:\n    - Medium-Term Revenue Plan (MTRP) aims to raise total revenues by at least 2 percentage points to 26 percent of GDP in 2026 through tax policy, tax administration and SOE reform measures.\n    - Expansion of digitalization of payments and discontinuation of tax exemptions for several large investment projects in 2024.\n    - Time-bound action plan to streamline tax exemptions and customs preferences.\n    - Strengthen appraisal, selection and oversight of internally financed capital projects to enhance public investment efficiency.\n  - Strengthen SOE governance and oversight:\n    - MOF expanded financial monitoring coverage from 27 SOEs to 77 entities with state participation.\n    - Amendments to SOE board composition regulations to ensure transparent and competitive appointments.\n    - Expanded scope of the annual fiscal risk statement to cover SOE profitability, leverage, and budget allocations.\n    - Publication of an updated SOE list and completion of sectorization exercise to improve monitoring.\n  - Electricity sector reforms required:\n    - Low collection rates, high technical and commercial losses, and tariffs below cost recovery led Barki Tojik to accumulate sizable arrears.\n    - Measures needed: improve collection rates for largest consumers, roll-out smart metering, increase penalties for electricity theft, and strengthen cost controls.\n    - Electricity tariff was increased by about 15 percent in April 2025; further annual tariff adjustments envisaged to reach cost recovery by 2027."
    },
    {
      "heading": "Monetary, exchange rate, and financial sector policies",
      "content": "- NBT policy and inflation framework:\n  - NBT lowered its inflation target from 6 to 5 percent (±2 percent) for 2025.\n  - Policy rate lowered by 25 basis points to 8.75 percent in February 2025.\n  - Real policy rate is still relatively high at about 5 percent (based on realized inflation).\n  - Monetary policy should remain data-driven and vigilant to potential upward demand pressure from strong credit growth and robust financial inflows.\n  - Proactive liquidity management is essential to moderate the impact of the NBT’s gold purchases and FX interventions on the money supply.\n- Exchange rate and FX market developments:\n  - NBT measures to modernize the local FX market: ending auctions of inward transfers; improving mechanism for public sector FX transactions; enhancing dissemination of FX rate information; introducing price-based auctions for FX interventions to facilitate price discovery.\n  - Recommendation: limit FX operations to avoiding disorderly market conditions to facilitate FX market development and greater exchange rate flexibility.\n- Financial sector stability and supervision:\n  - Banking system strengthened after resolution of two troubled banks but remains exposed to volatile external environment and possible reversal of inflows.\n  - Strong household lending warrants careful macroprudential oversight to ensure prudent lending standards.\n  - Close monitoring needed of maturity mismatches and funding- and asset-side concentration risk.\n  - Planned introduction of macroprudential tools and forward-looking stress tests is essential to manage risks from strong credit growth."
    },
    {
      "heading": "Structural reforms and governance",
      "content": "- Reform objectives: improve public sector efficiency; foster financial and private sector development; promote an enabling investment climate for private sector-led growth.\n- Governance, transparency, and financial safety nets:\n  - Transparent governance and policy frameworks and robust financial safety nets are key to strengthening trust in public institutions and macro-financial stability.\n  - Transparent corporate ownership is critical to an enabling business climate and prudent AML-CFT standards.\n- Data and statistics:\n  - Authorities have started publishing fiscal statistics in line with GFS standards and broadened SOE coverage.\n  - Further steps: compile quarterly demand-side GDP data and expand use of GFS-based fiscal data to strengthen data quality."
    },
    {
      "heading": "Policy dialogue and next steps",
      "content": "- Discussions on policies to complete the second review under the Policy Coordination Instrument (PCI) are well advanced and will continue following this mission.\n- The mission expressed appreciation for the Tajik authorities’ hospitality, close collaboration, and constructive discussions.\n\nIMF mission led by Mr. Matthew Gaertner; mission held April 2-15, 2025 in Dushanbe. Statement issued May 2, 2025.\n\n---\n\n\n References\n\n- Republic of Tajikistan and the IMF\n- IMF Policy Advice -- A Factsheet\n- Gold in the IMF -- A Factsheet\n- Mission Concluding Statements\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2025/05/02/mcs-tajikistan-staff-concluding-statement-for-the-2025-article-iv-mission"
    }
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    "Published: May 2, 2025",
    "Real GDP increased 8.4 percent in 2024, marking the fourth consecutive year of growth above 8 percent, driven by mining, manufacturing, agriculture, public and private investment.",
    "Current account surplus of 6.2 percent of GDP in 2024.",
    "FX reserves rose from $3.6 billion at end-2023 to $4.7 billion at the end of February 2025, amounting to 7 months import coverage.",
    "Twelve-month inflation stood at 3.7 percent in February, within the NBT’s updated target range of 5 percent (±2 percent) for 2025; price stability reflected stable imported food and fuel prices and an appreciation of the somoni.",
    "Reserve money growth was 32 percent (y/y) in February, moderated since mid-2024 but boosted by the NBT’s gold purchases.",
    "Banks’ NPL ratio declined to 7.0 percent in February amid balance sheet clean-up largely via write-offs of legacy NPLs.",
    "Credit to the private sector grew at 29 percent (y/y) in February, driven by household loans in local currency and new retail lending products.",
    "Medium-term projections and key risks:",
    "Fiscal outcome in 2024: fiscal surplus of 0.3 percent.",
    "Revenue performance supported by stable revenue growth despite VAT reduction from 15 to 14 percent.",
    "2025 budget envisages a fiscal deficit of up to 2.5 percent of GDP, conditional on available financing.",
    "Public debt declined to 25 percent of GDP at the end of 2024; public debt assessed as sustainable but at high risk of distress due to large debt service obligations during 2025-2027; the first semi-annual Eurobond repayment was completed as planned in March.",
    "Key fiscal policy priorities and measures:",
    "NBT policy and inflation framework:",
    "Exchange rate and FX market developments:",
    "Financial sector stability and supervision:",
    "Reform objectives: improve public sector efficiency; foster financial and private sector development; promote an enabling investment climate for private sector-led growth.",
    "Governance, transparency, and financial safety nets:",
    "Data and statistics:",
    "Discussions on policies to complete the second review under the Policy Coordination Instrument (PCI) are well advanced and will continue following this mission.",
    "The mission expressed appreciation for the Tajik authorities’ hospitality, close collaboration, and constructive discussions.",
    "[Republic of Tajikistan and the IMF](http://www.imf.org/external/country/TJK/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Gold in the IMF -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2022/gold-in-the-imf)",
    "[Mission Concluding Statements](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)"
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