IMF Executive Board Concludes Third Review Under the Policy Coordination Instrument for Tajikistan

IMF News, December 18, 2025

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The Executive Board concluded the Third Review under the Policy Coordination Instrument (PCI) for Tajikistan on December 18, 2025, and endorsed the staff appraisal without a meeting on a lapse-of-time basis.
Tajikistan’s twenty-two-month program under the PCI was approved in February 2024 (Press Release No. 24/60).
Program implementation has remained on-track, with all but one of the quantitative targets for the Third Review met.
Press Release No. 25/435.

Real GDP growth: 8.2 percent in the first three quarters of 2025.
Inflation: 2.8 percent (y/y) in September 2025; inflation noted elsewhere as “close to 3 percent (y/y).”
Growth drivers: development of the mining sector and robust aggregate demand.
Large financial inflows, including strong remittance inflows, supported aggregate demand and the external position.

Current account: further increase in the current account surplus in the first half of 2025 driven by strong remittance inflows that offset higher imports.
Gross reserves: rising to about eight months’ import coverage in the first half of 2025.
Outlook: as inflows of remittances gradually normalize, the current account balance is projected to shift into a small deficit over the medium to long term; gross reserves are expected to remain at comfortable levels.

Growth projection: 6 percent for 2026.
Inflation outlook: expected to remain within the central bank’s target range.
Main vulnerabilities:
- Weaker external conditions, particularly slower growth in major destination countries for Tajikistan’s migrant workers.
- Risks from large FX inflows and strong credit growth.
- Downside risks from the recent introduction of EU sanctions on three domestic banks.

FX and liquidity management:
- Greater exchange rate flexibility recommended.
- FX operations by the NBT should be limited only to smooth disorderly market conditions to facilitate development of the FX market and enhance exchange rate flexibility.
Macroprudential and supervisory actions:
- Expand the use of macroprudential tools.
- Monitor lending standards more closely.
- Align off-site and on-site supervision practices with international standards.
Sanctions-related monitoring and contingency measures:
- Require more frequent and granular reporting on liquidity and capital positions of sanctioned institutions.
- Conduct enhanced on-site inspections focusing on banks’ compliance frameworks and adherence to sanctions-related obligations.
- Develop contingency plans and expand stress testing to assess system-wide risks under adverse scenarios.
Note: Large financial inflows have contributed to strong growth in bank deposits, but reversal of inflows could pose challenges to the banking system.

Fiscal outturn: overperformed the program target in the first half of 2025 due to strong revenue collection; supported the continued decline in public debt.
Fiscal policy guidance:
- Improve revenue mobilization to create space for priority social and development spending.
- Enhance expenditure efficiency.
- Fiscal deficit target of 2.5 percent of GDP remains an important anchor to ensure that debt remains on a favorable medium-term trajectory.
Public debt: continued decline supported by prudent fiscal policy.
Government securities market: domestic issuance through market-based auctions advanced in 2025; establishing a robust secondary market is advised to expand the investor base and deepen the market.

Collection and tariff issues:
- Improvement in Barki Tojik’s payment discipline during 2025; roll-out of smart metering and efforts to reduce electricity theft showed encouraging results.
- Collection rate from several large state-owned consumers remains low and undermines the financial position of the electricity sector.
- Recommendation: increase collection rates from large electricity consumers and raise tariffs further to bring them to cost recovery to reduce quasi-fiscal losses.

Priority reform areas:
- Strengthen governance and transparency of SOEs.
- Improve the anti-corruption framework and institutional oversight.
- Improve appraisal, selection and oversight of internally financed capital projects in line with the PIMA recommendations.
- Broader improvements in transparency and the business environment to support diversified private sector–led activity and expand employment opportunities.
Objective: foster stronger, more job-rich growth and strengthen resilience to external shocks, particularly to create domestic job opportunities for Tajikistan’s young and fast-growing population.

Directors endorsed the staff appraisal highlighting continued favorable macroeconomic performance in 2025 and the need to address structural vulnerabilities to support domestic job creation.
The Third Review under the PCI is the final review under this arrangement.
A missed quantitative target (QT) on targeted social assistance spending was noted as non-observance but described as minor: the QT was missed by a small margin due to revised eligibility criteria to better target vulnerable groups.
Following completion of the PCI, it is proposed that the next Article IV consultation will be conducted on the standard 12-month cycle.

International Monetary Fund press release, December 18, 2025.