Tajikistan Economic Outlook
According to estimates from the National Bank of Tajikistan, annual GDP grew by 8.0% in 2022 due to stronger output in the agricultural, transport, and communication sectors. Turning to Q1 2023, momentum accelerated: Annual GDP growth in January–March reached 8.2% amid likely stronger services activity. However, growth in the agricultural and industrial sectors slowed compared to Q4. Meanwhile, a sustained softening in price pressures since the end of 2022 prompted the National Bank to cut its key policy rate in February and May by a total of 300 basis points. This loosening should have boosted investment and spending in early 2023. In other news, in May, Tajik authorities secured a USD 500 million loan from a Chinese bank to continue the construction of the Roghun hydropower plant. The finalization of the dam, earmarked for 2028, should enable the country to become an electricity exporter.
Inflation inched down to 3.4% in April from 3.6% in March, edging further below the National Bank’s 4.0–8.0% target band. Meanwhile, on 1 May, the Bank cut its key interest rate by 100 basis points to 10.00% to stimulate activity. Our panelists expect inflation to rise from current levels this year. Commodity price swings are a risk.