IMF Staff Country Reports

This 2022 Article IV Consultation discusses that Tajikistan continued to experience strong growth in 2022, with minimal disruption from the war in Ukraine as strong financial inflows supported domestic demand and liquidity. Fiscal space remains limited due to debt sustainability concerns, and the fiscal deficit target of 2.5 percent of gross domestic product is an important anchor to keep public debt on a downward trajectory. Inflation remains well-contained, but strong monetary growth in 2022 warrants caution and macroprudential controls could help mitigate potential risks. Enhancing exchange rate flexibility is also an important part of the policy toolkit to absorb external shocks. A transition to inflation targeting will require sustained efforts to improve monetary policy transmission. Emerging risks call for further strengthening banking supervision in line with the 2022 Financial Sector Stability Review. Far-reaching structural reforms are critical to unlock the economy's long-term potential and support growth that is more inclusive.