Republic of Tajikistan
Tajikistan became a full member of Eurasian Development Bank in June 2009. Its contribution to the Bank’s capital is US $500,000.
In Q3 2016, Tajikistan’s year-on-year GDP growth was 6.9% (6.7% in Q2 2016). The growth was ensured by high investment activity financed by both foreign investment inflows and an increase in the government’s foreign debt. In terms of added value, economic growth in Q3 2016 was supported by increased outputs in construction (28.8% year-on-year), the industrial sector (24.1%) and retailing (14.8%). The economic slowdown in agriculture by 0.6% year-on-year in the same quarter was partly due to the early summer and the early start of field work (the growth in Q2 2016 was 15.2%).
Inflation accelerated in Q3 2016. While the average increase in the consumer price index in Q2 was 5.3% year-on-year, in Q3 it grew by 6.3% because of a short-term growth in transport and education fees and the price of liquefied gas.
After an increase in the base rate in July 2016, the National Bank of Tajikistan did not change it until the end of the year. The TJS-denominated money supply maintained high growth rates. In November 2016, the M2 money aggregate grew by 59.8% compared to the beginning of 2016. This was partly due to the transfer of foreign currency deposits into TJS-denominated deposits or cash. The banking system’s loan portfolio fell by 7.4% as at the end of November 2016, compared to December 2015.
The budget deficit in January-September 2016 was 1.3% of GDP. Budget revenues in January-September 2016 grew by 16% compared to the respective period of 2015, primarily as a result of foreign loans and grants as well as special incomes of budget-funded organisations. The increase in tax collection over the same period remained moderate and stood at 4.1%. Fiscal expenditure grew by 30% (compared to the first nine months of 2015) due to the country’s high investment activity. In particular, fiscal expenditure for the fuel and energy sector grew 1.6 times over the first nine months of 2016 compared year-on-year. In October 2016, fiscal revenues continued to decline and fiscal expenditure continued to increase at a significant pace, suggesting that the overall budget in 2016 may turn unbalanced.
EDB’s priorities in Tajikistan
EDB’s investment activities in Tajikistan in 2013-2017 included the following:
- The Bank supports power projects by providing expert and technical assistance in the development of necessary technical and economic documents, as well as finance for investment projects (subject to EDB’s Environmental and Social Responsibility Policy and international treaties).
- EDB will help to develop export-orientated sectors, diversify agriculture, improve productiveness, and solve food security issues by providing targeted finance, in particular for the development of vertically integrated agricultural enterprises.
- Given the importance of transport infrastructure for the country’s economy, the Bank is ready to support projects servicing export and import exchanges and promoting improvements in transport services and logistics, as well as renovations of the transport fleet and key assets.
- EDB will continue to provide targeted loan facilities to financial institutions to ensure access for finance for SMEs (targeted loans to SMEs, finance for agricultural producers, trade finance, and lease finance under approved programmes).