Tajikistan’s growth in the first half of 2013 remained robust at 7.5%. Fueled by remittances, retail trade and services continued to be the main drivers of growth, rising by 13.2% and 8.4% respectively. Industry expanded by 6.6%, reflecting more than 80% growth in mining and extractive industries and 16% expansion in chemicals. However, a 2.8% decline in aluminum output, caused by shortages of natural gas, and a 0.8% reduction in industrial processing constrained industrial output. Agriculture grew by 12.1% and is expected to continue to grow strongly for the rest of the year.
|Selected Economic Indicators (%) - Tajikistan||2013||2014|
|ADO 2013||Update||ADO 2013||Update|
|Current Account Balance (share of GDP)||-5.0||-4.5||-4.8||-4.0|
Source: Asian Development Outlook (ADO) 2013 Update; ADB estimates.
Noting the economy’s strong performance in the first 6 months, as well as the expectation that higher remittances and a continuing accommodative monetary policy will support growth in trade and services alongside moderate industrial growth, the Asian Development Outlook (ADO) 2013 Update raises the 2013 growth forecast to 7.0% from 6.5% in ADO 2013. However, aluminum and cotton production are likely to shrink further in response to lower international prices. The growth forecast for the gross domestic product (GDP) in 2014 remains at 6.0%.
Average inflation rose slightly to 6.2% in the first half of 2013, higher than in the same period of 2012. However, a stable exchange rate has helped to moderate inflationary expectations, and the authorities remain committed to prudent fiscal and monetary policies, so the inflation rate forecast remains at 6.5% in 2013 and 7.0% in 2014, as projected in ADO 2013 in April.
Exports shrank at an annual rate of 8.6% during the first half of 2013, dragged down mainly by lower aluminum and cotton earnings, while higher remittances helped boost imports by 8.7%. Import growth slower than previously expected (partly reflecting a temporary slowdown in loan disbursements for the public investment program) and continued healthy remittance inflows will help to ease the current account deficit during the second half of the year. Accordingly, the current account deficit is now expected to narrow to 4.5% in 2013 and further to 4.0% in 2014, down from ADO 2013 projections of 5.0% and 4.8%, respectively.
Source: ADB. 2013. Asian Development Outlook 2013 Update. Manila.