Economic growth in Tajikistan remained robust at 6.7% in the first half of 2014, though less than the 7.5% recorded in the same period of 2013. On the demand side, growth reflected higher consumption and a 28.4% rise in investment. On the supply side, industrial expansion halved to 2.9% from 6.6% in the same period of 2013, reflecting a 47% contraction in aluminum production and increases in coal and cement production, food processing, and electricity generation and distribution. Growth in agriculture also slowed, to 6.0%, as cultivated area contracted, particularly for cotton.

Selected Economic Indicators (%) - Tajikistan 2014 2015
ADO 2014 Update ADO 2014 Update
GDP Growth 6.0   6.0  5.8   5.8 
Inflation 5.5   6.5  6.0   6.0 
Current Account Balance (share of GDP) -2.1   -2.1  -2.3   -2.3 

Source: ADB estimates.

Remittance inflows declined slightly in the first half of 2014, as growth slowed in the Russian Federation, but are expected to remain strong enough to continue fueling growth through private consumption. Retail trade and services are expected to continue growing strongly for the rest of 2014, while continued moderate growth is expected in industry, construction, and agriculture. Accordingly, the growth forecasts in the Asian Development Outlook (ADO) 2014 are maintained.

Average inflation rose slightly to 6.6% in the first half of 2014, higher than in the same period of 2013, as the Tajik somoni depreciated by about 5% in the first quarter of 2014. The exchange rate remained relatively stable in the second quarter of 2014, moderating inflationary expectations. The authorities remain committed to maintaining prudent fiscal and monetary policies. Nevertheless, the inflation forecast is raised by 1.0 percentage point for 2014, with no change for 2015.

Exports shrank by 14.8% year on year in the first 6 months of 2014, mainly tracking declines in aluminum and cotton exports. Meanwhile, imports soared by 23.5%, fueled by remittances. Continued healthy remittance inflows are expected to help limit the current account deficit for the rest of the year. Projected current account deficits in ADO 2014 are retained for both 2014 and 2015.

Source: ADB. 2014. Asian Development Outlook 2014 Update. Manila.