Press Release No. 24/11

IMF Staff Reaches Staff-Level Agreement on Tajikistan’s Policy Coordination Instrument

January 16, 2024

• The IMF team and the Tajik government reached a staff-level agreement on a set of macroeconomic policies and structural reforms that would support the approval of a new program under the Policy Coordination Instrument (PCI).
• The Tajik economy has returned to robust and broad-based growth following the COVID-19 pandemic. A tight monetary stance has helped keep inflation well contained while the fiscal deficit has remained within the authorities’ medium-term target.
• The requested PCI aims to maintain macroeconomic stability and strengthen the authorities’ policy frameworks while advancing governance and transparency reforms to achieve more sustainable and inclusive growth.

Washington, DC: An International Monetary Fund (IMF) team led by Mr. Matthew Gaertner held discussions in Dushanbe and Washington D.C. in response to the authorities’ request for support under the Policy Coordination Instrument (PCI).

At the conclusion of the discussions, Mr. Gaertner issued the following statement:

“I am pleased to announce that the Tajik authorities and the IMF mission team have reached a staff-level agreement on macroeconomic policies and structural reforms that would support a twenty-two-month–arrangement under the non-financing Policy Coordination Instrument (PCI). The staff-level agreement is subject to IMF management approval and Executive Board consideration in the next month. The program will support the authorities in anchoring their macroeconomic policies while advancing structural reforms in key areas and enhancing social assistance programs for the most vulnerable.

“The Tajik economy has returned to robust growth following the COVID-19 pandemic, as resilient remittances continue to support domestic demand and contribute to increased dynamism in the services, agriculture and construction sectors. A tight monetary stance has helped keep inflation well contained while the fiscal deficit has remained within the authorities’ medium-term target, helping to anchor a reduction in the public debt-to-GDP ratio. After registering a large surplus in 2022, the current account has shifted into a small deficit, but international reserves remain at comfortable levels. Financial sector asset quality indicators continue to improve, supporting banks’ profitability and contributing to robust credit growth.

“The IMF-supported program aims to maintain macroeconomic stability and strengthen the authorities’ policy frameworks while advancing governance and transparency reforms to achieve more sustainable and inclusive growth. Reform priorities under the program will be anchored around three key pillars: (i) strengthen fiscal resilience to create space for high-priority social and development spending while preserving debt sustainability; (ii) enhance monetary, exchange rate and financial sector policies to improve resilience to external shocks, and; (iii) advance governance and transparency reforms to foster inclusive growth and support the authorities in achieving their social and development objectives.

“Tajikistan has received previous support from Fund-supported arrangements. The last Fund-supported arrangement under the Extended Credit Facility (ECF) was completed in 2012. Tajikistan also received a disbursement under the Rapid Credit Facility (RCF) in 2020 during the COVID-19 pandemic. The PCI request aims to foster policy continuity while anchoring implementation of structural reforms and catalyzing financing for high-priority social and infrastructure projects.

“The IMF team held meetings with the Economic Advisor to the President Negmatullo Hikmatullozoda, National Bank of Tajikistan Chairman Hokim Kholiqzoda, Minister of Finance Faiziddin Qahhorzoda, Minister of Economic Development and Trade Zavqi Zavqizoda, other senior government officials, and representatives of international financial institutions and the diplomatic community. The team would like to thank the authorities for their excellent cooperation and constructive discussions.”