Publication: Tajikistan : Moderated Growth, Heightened Risks
Date
2014-10
ISSN
Published
2014-10
Author(s)
World Bank Group
Abstract
Tajikistan s economic growth moderated
to 6.7 percent in the first half of 2014 from 7.5 percent a
year earlier as activity slowed in almost all sectors.
Weaker world economic growth and lower prices for cotton and
aluminum adversely affected the major export-oriented
industries, pushing total industrial growth below 3 percent
from nearly 7 percent a year earlier. Lower inflows of
remittances due to the slowdown in Russia have translated
into lower domestic demand and slower growth in services and
housing construction. Though growth in agricultural output
also moderated due to heavy rains and low temperatures, it
was still a healthy 6 percent. Inflation began to pick up as
food prices rose and tariffs for utilities were adjusted,
reaching 4.7 percent for the first half of 2014 compared to
1.6 percent a year earlier. However, fixed investment grew
swiftly as the public investment program got underway. GDP
growth is projected to ease to 6.5 percent in 2014 because
of the spillover effect from the slowdown in Russia and in
export sales. A Russian slowdown affects Tajikistan largely
through the remittances channel. A slackening in remittances
weighs heavily on household demand, notably demand for
services and housing construction. Inflation pressures are
expected to increase but stable global food prices should
help to keep growth in inflation within a single digit.
Despite slower economic growth the fiscal deficit is
projected to remain unchanged in 2014 because of higher than
expected revenues from foreign trade, reforms in revenue
collection, and spending restraint. The current account
deficit is projected to widen to 3.7 percent of GDP because
of sluggish export growth and the remittance slowdown.
Tajikistan could perhaps benefit from the Russian ban on
import of food from the West but fragile market links,
limited economies of scale, poor access to credit, and
barriers to entry and expansion limit Tajik ability to
benefit from increased Russian demand.
Link to Data Set
Citation
“World Bank Group. 2014. Tajikistan : Moderated Growth, Heightened Risks. Tajikistan Economic Report;No.6. © Washington, DC. http://hdl.handle.net/10986/20674 License: CC BY 3.0 IGO.”