The World Bank Group is helping Tajikistan achieve its goals of sustained economic growth, boosting exports, and creating more and better jobs for its citizens, through enhanced private-sector development and greater investment in human capital and public services.
TAJIKISTAN
2023
GDP, current $ billion
GDP per capita, current $
Life Expectancy at Birth, years
Over the last decade, Tajikistan experienced strong economic performance, with growth rate averaging above 7.1%. Strong growth, higher wages, and international remittances helped reduce the number of people living in poverty from 32% of the population in 2009 to an estimated 12.4% in 2022 (at the international poverty line of $3.65/day).
Despite significant progress, Tajikistan remains vulnerable to external shocks due to high dependency on migrant remittances, an undiversified economy, as well as high risk of debt distress. The inflow of workers’ remittances accounts for a third of annual GDP. While public debt is sustainable, the risk of debt distress remains high.
Tajikistan has enormous growth potential due to a young and growing population, water and hydropower potential, and development in areas like agriculture and food processing, mineral resources, tourism, and more.
The Government of Tajikistan set an ambitious target—to more than double or triple domestic incomes between 2016 and 2030—which will require a new growth model centered around a dynamic private sector. This transition requires implementing structural reforms, focusing on public sector efficiency and transparency, enhancing the competition framework, and improving the investment climate, energy sector, trade connectivity, and access to finance. Given Tajikistan’s high exposure to climate risks, it is critical to strengthen environmental resilience through mitigation and adaptation.
World Bank Portfolio
Tajikistan joined the World Bank in 1993 and IDA in 1994. Since then, the World Bank has provided over $2.9 billion in grants and highly concessional credits to support Tajikistan’s efforts to reduce poverty and improve people’s lives.
The Country Partnership Framework (CPF) for 2019-2023 supports Tajikistan’s efforts to complement its remittance-financed, import-reliant economic model with a focus on boosting private-sector development and exports. The portfolio has expanded rapidly during the current CPF period. As of April 2024, the active portfolio includes 26 IDA-funded investment lending projects with a net commitment of $1.64 billion—of which 23 national operations with net IDA commitments of $1.44 billion and three regional operations purely focused on Tajikistan ($200 million). The portfolio’s largest share is in the energy sector (37%), followed by water (10%), transport (8%), education and agriculture (each 7%).
On average, projects approved by the Board of the World Bank for Tajikistan over FY21-23, amounted to US$845 million (including development policy operations and regional projects fully allocated to Tajikistan). The projects financed investments in energy, water, transport, agriculture, disaster risk management, health, education, social protection, as well as institutional capacity building of tax, finance, and statistics bodies.
Recent Economic Developments
Tajikistan's economy grew by 8.3% in 2023, supported by remittance-induced domestic demand and exports of precious metals. The economy experienced a broad-based expansion led by the agriculture sector, followed by industry, construction, and services.
Poverty under the Lower Middle-Income Countries (LMIC) poverty line is estimated to have declined from 12.4% in 2022 to 10.7% in 2023. According to the Listening to Tajikistan survey, about 42% of households had a migrant member and the share of households receiving remittances rose marginally from 17% in 2022 to 18% in 2023.
Consumer price inflation remained contained in 2023, at 3.7% on average. Low inflation was supported by limited depreciation of the local currency, administrative price controls, solid agricultural output, and drop in fuel prices.
The country’s central bank gradually loosened monetary policy, reducing the policy rate from 13% to 10% in 2023 and then to 9.5% in February 2024.
Gross international reserves stood at $3.6 billion (7.7 months of import cover) at end-2023, slightly below their level of $3.8 billion at end-2022.
The 2023 budget deficit is estimated at 1.4% of GDP, which is similar to 2022. Due to robust economic activity and better tax administration, tax receipts increased from 18.5% in 2022 to 19.2% percent of GDP in 2023.
Economic Outlook
Tajikistan's economy is expected to grow at 6.5% in 2024, supported by private consumption as Russia’s demand for labor migrants remains strong, as well as by continued growth in domestic real wages and higher public spending on infrastructure.
Poverty, at the $3.65 line (in 2017 Purchasing Power Parities (PPP)), is projected to decline from 10.7% in 2023 to 9.2% in 2024.
GDP growth potential is estimated at 4.5% to 5% in the medium term unless ambitious structural reforms are implemented. Inflation is expected to remain within the target range of 4% to 8%.
The fiscal deficit is expected to be capped at 2.5% of GDP over the medium term. Spending on the Rogun Hydro Power Project and other large infrastructure projects is expected to be financed by improving revenues, financing from development partners, and offsetting cuts to non-priority spending.
The Government plans to continue to raise the share of budget spending on social sectors, including enhancing targeted social assistance to better safeguard vulnerable population groups.
Several factors pose risks to Tajikistan's economic outlook. These include geopolitical uncertainty, slower-than-expected global growth and tighter financial conditions, the high contingent liabilities of the state-owned enterprise sector, and the slow pace of structural reforms.