Tajikistan Economic Forecast

According to estimates from the National Bank of Tajikistan, the economy grew by 8% in 2022. The upturn was driven by stronger output in the agricultural, transport, and communication sectors, while the pace of expansion in the construction, industrial and trade sectors softened. Turning to Q1 2023, momentum remained healthy: Annual GDP growth in January–February reached 8%. 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 Central 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. Meanwhile, several soldiers died in a border clash with Afghanistan in April amid alleged drug trafficking and tensions with the Taliban regime. This bodes poorly for regional stability.

Inflation slowed to 3.6% in March from 4.5% in February, edging below the Central Bank’s target of 6.0% plus or minus 2.0 percentage points. In other news, 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.