IMF Staff Country Reports

This paper presents Republic of Tajikistan’s Request for a Twenty-Two-Month Policy Coordination Instrument. Tajikistan’s favorable post-pandemic economic performance continued in 2023, with strong, broad-based growth and low inflation. The program focuses on improving fiscal resilience to increase space for priority social and development spending while keeping public debt on a downward trajectory. Fiscal reforms under the program increase revenue mobilization and spending efficiency and strengthen social protection of the most vulnerable. Monetary, exchange rate and financial sector policies aim to strengthen the economy’s resilience to shocks. Improvements in exchange rate flexibility and monetary policy transmission will enhance shock absorption and facilitate a gradual transition toward inflation targeting. Tajikistan is reliant on remittances, primarily from Russia, to support domestic demand and provide a source of foreign exchange. Risks to the outlook are tilted to the downside in the context of heightened geopolitical tensions and sanctions on Russia.