The Asian Development Outlook (ADO) April 2025, ADB’s flagship economic publication released yesterday, notes that growth strengthened further in Tajikistan in 2024 as substantial remittance inflows boosted demand for goods and services. Inflation decreased, reflecting smaller price increases for food and other goods.  Growth is projected to decelerate in 2025 and 2026 in line with somewhat diminished remittances but remain robust. Inflation is expected to rise on increased consumer lending and further increases in tariffs and social payments, stabilizing near the middle of the government’s target range.  Digital transformation is crucial for Tajikistan’s development and sustained growth.

On the demand side, public sector wage increases and a surge in remittances contributed to 14.8% growth in domestic consumption.  Despite stricter immigration regulations in the Russian Federation and potential negative spillover from the Russia’s war in Ukraine, remittances comprised 48% of GDP in the first 3 quarters of 2024, continuing to fuel consumption and credit growth.

In 2024, public investment spending rose by 26.1% to reach 7.4% of GDP.  The deficit in net merchandise exports widened from 28.0% of GDP in 2023 to 35.6% in 2024 as imports grew and exports shrank.

A surge in remittances widened the current account surplus from 4.8% of GDP in 2023 to 6.3% in 2024. Total trade comprised US$8.95 billion, rising by 7.5% from 2023.  The merchandise trade deficit widened as imports grew by 19.2% while exports declined by 20.5%.  However, the rise in remittances boosted net primary and secondary income by 40.0%, more than offsetting the larger trade deficit.  Exports fell from US$2.45 billion in 2023 to US$1.95 billion as unfavorable weather and higher fertilizer prices caused exports of vegetables to decline by 51% and of cotton by 14.3%, while higher import tariffs imposed by Uzbekistan helped cut cement exports by 30.4%.  Exports of precious and semiprecious metals, dominated in recent years by gold, decreased by 69.6% because of lower exports of gold, antimony, and other metals, but still accounted for 17.8% of total exports.  The central bank’s monetization of gold produced in 2023 buoyed foreign exchange reserves at an estimated 7.1 months of import cover at the end of September 2024.  At the same time, the central bank’s need for gold subsided, as reserves grew by 150% in the past 5 years.