Press Release No. 11/341

Press Release No. 11/341
September 21, 2011

An International Monetary Fund (IMF) mission led by Mr. Todd Schneider visited Dushanbe during September 12 - September 21 to conduct discussions for the Fifth Review of the Extended Credit Facility (ECF) arrangement¹. At the conclusion of the visit, Mr. Schneider issued the following statement:

“Discussions were productive and there was progress on the set of policies and actions for the rest of 2011 and 2012. Further discussions will be conducted in Washington, DC during the Annual Meetings of the IMF and the World Bank later this week.

“Tajikistan’s economic recovery continues to take hold. Real GDP growth reached 6.9 percent through the first half of 2011. Rising remittances supported domestic trade and services, but growth is also seen in agriculture, construction, and industry. Inflation has been a significant challenge—peaking at 14.8 percent in May, but since declining moderately.

“Looking ahead, real GDP growth should reach at least 6 percent in 2011, particularly if prices for key exports remain high, and regional partners continue to grow. Nurturing the recovery is important, and in this context inflation remains a key policy challenge. Global food and fuel prices are expected to stabilize in the coming year, but the mission welcomes the authorities’ intention to carefully coordinate fiscal and monetary policies to protect macroeconomic stability. Over the medium-term, the mission advises the authorities to develop and utilize targeted social programs to provide social assistance to the poor.

“Financial sector indicators have stabilized in recent months, but the mission urged the National Bank of Tajikistan to implement the Financial Sector Stability Plan, aimed at addressing non-performing loans in the banks, and to strengthen accounting and supervisory standards. Over time, this should help to bolster public confidence in Tajikistan’s banks, create room for private sector credit, and thus help support economic growth and employment. Also, with a view to increasing transparency and strengthening prospects for inclusive economic growth, the mission urged continued focus on preparing a new tax code. IMF technical assistance is scheduled to work soon in this area.

“The mission also welcomed the government’s continued commitment to transparency. Particularly welcome have been the publication of quarterly reports on the operations of the Roghun OJSC and the commitment to continue holding Roghun shareholder’s meetings in the future, after successfully holding the first meeting in May.”

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¹ The 3-year ECF arrangement with Tajikistan amounts to SDR 104.4 million (about $165 million) (see Press Releases No. 09/136 and No. 10/351). Approval of the 5^th review would make SDR 13 million (about US$20 million) available to Tajikistan, bringing total disbursements under the arrangement to SDR 91.4 million (about US$144 million).