Tajikistan, a Central Asian country with a population of about 10.1 million, has demonstrated significant economic growth in recent years despite facing significant structural challenges. World Bank's ECA Economic Update Spring 2024 Report It sheds light on Tajikistan's economic landscape, highlighting both its achievements and the obstacles it faces on its path to sustainable development.
Economic outlook and key conditions
Tajikistan's economy has been growing at an impressive rate, averaging more than 7% per year over the past decade. However, despite this growth, Tajikistan remains the poorest country in the ECA region with a gross national income (GNI) per capita of $1,210 in 2022. Also, 12.4% of households in a lower-middle-income country (LMIC) live below the poverty line. , reflecting persistent income inequalities in the population.
The country's economic potential is constrained by various factors including barriers to market competition, weak institutional structures and limited human capital. Production levels remain low as the private sector struggles to create adequate employment opportunities. Tajikistan relies heavily on labor migration, primarily to Russia, and exports natural resources, particularly metals and minerals, which constitute a significant portion of its total exports.
Recent developments and economic performance
Despite these challenges, Tajikistan's economy is projected to expand by an impressive 8.3% in 2023, driven by remittance-fueled domestic demand and exports of precious metals. Growth was broad-based, with the agricultural sector leading the expansion, followed by industry, construction and services. As a result, poverty below the LMIC poverty line decreased from 12.4% in 2022 to 10.7% in 2023, supported by growth in domestic real wages.
Tajikistan maintained a strong current account surplus of 5.7% of GDP in 2023, with poverty declining and domestic real wages rising. However, inward remittances declined slightly after peaking in 2022, partially offset by an increase in gold exports. Despite the freeze in foreign direct investment (FDI) inflows, gross international reserves remained stable, providing a buffer against external shocks.
Looking ahead, Tajikistan's economy is projected to grow by 6.5% in 2024, supported by private consumption and public investment in infrastructure. However, challenges remain, including the need for ambitious structural reforms to support private sector-led job creation and improve public service delivery.
Daryo previously announced that Tajikistan will experience a steady annual GDP growth rate of 6.5% for both 2024 and 2025, according to the Asian Development Bank (ADB) outlook.
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