IMF Staff Country Reports

This paper discusses Republic of Tajikistan’s First Review under the Policy Coordination Instrument (PCI) and Request for Modification of a Quantitative Target and a Reform Target. The PCI aims to anchor macroeconomic policies and support structural reform implementation to maintain macro-financial stability and foster more sustainable and inclusive growth. The fiscal deficit is projected to remain within the long-term anchor of 2.5 percent of gross domestic product, ensuring a continued decline in public debt. Policies should aim to strengthen resilience against external shocks and address structural constraints to attaining more sustainable and inclusive growth. Improving revenue mobilization and spending efficiency is critical to increasing space for development priorities. Monetary policy should remain vigilant and manage liquidity proactively in the context of large foreign exchange inflows and strong credit growth, with the exchange rate playing a greater role as a shock absorber. Pressing ahead with broad-based state-owned enterprise reforms is critical to mitigate fiscal risks and create space for private sector led growth.