Declines in remittances and the traditional exports of aluminum and cotton slowed Tajikistan’s growth to 6.7% in 2014 from 7.4% a year earlier. Inflation worsened to 6.1%, and the current account deficit to 7.9% of the gross domestic product. Expansion will likely slow further to 4.0% in 2015 before recovering to 4.8% in 2016. Inflation will accelerate to 10.0% in 2015 with currency depreciation before easing to 6.5%. The current account deficit should narrow to 5.9% in 2015 and 4.8% in 2016.
|Selected Economic Indicators (%) - Tajikistan||2015||2016|
|Current Account Balance (share of GDP)||-5.9||-4.8|
Source: ADB estimates.
Growth slowed to 6.7% in 2014 from 7.4% in 2013 as remittance inflows, which are equivalent to almost half of Tajikistan’s gross domestic product (GDP), fell sharply by 8.3% in United States dollar terms. The fall was most pronounced in the fourth quarter and reflected prolonged economic slowdown, lost jobs, and currency depreciation in the Russian Federation, which hosts up to 90% of the 1 million Tajik migrant workers.
Growth is projected to slow to 4.0% in 2015, reflecting a recession of at least 3.0% in the Russian Federation and continued weakness in the global economic outlook. Growth could recover somewhat to 4.8% in 2016 with some improvement in the Russian Federation and the external environment generally. This will likely be supported by new job creation along the Trans-Tajik Gas Pipeline, which was ratified by parliament in December 2014 and is slated to begin construction this year. Plans to increase social spending and raise public sector wages by 25% beginning in September 2015 should add to growth in 2016.
Excerpted from the Asian Development Outlook 2015.