21 Jun 2024 14:26

EDB forecasts 8% rise in Tajikistan's GDP in 2024

DUSHANBE. June 21 (Interfax) - Tajikistan's GDP could rise 8% in 2024; strong domestic demand is ensuring a high growth rate for the republic's economy, the Eurasian Development Bank said in their macroeconomic forecast.

"The National Bank will boost the economy next year as it lowers the interest rate and makes its exchange rate policy more flexible. As the regulator eases monetary policy, it will cause inflation to return to the target range (6±2%) at the end of 2024 and stabilize within it in 2025-2026," the report says.

Economic growth in the second and fourth quarters of 2024 will be constrained by a slowdown in demand growth from external markets, both outside and within the EDB's region of operations. This will negatively affect real export volumes and the influx of remittances and investments into Tajikistan. Meanehile, the negative impact of weaker demand dynamics from external economies will be balanced by rising prices for metals exported by Tajikistan, especially gold, the EDB said.

"We expect GDP growth to accelerate in 2025. Softer monetary conditions and investments made by authorities to develop the economy will boost demand. Second, electricity generation will recover in the second half of 2024, following a decline in the power sector of more than 12% YoY in 1Q2024 caused by low reservoir occupancy due to winter weather conditions. This will propel demand, too," the bank's analysts said.

The EDB forecasts that the economy of Tajikistan will grow 7.8% in 2026. Growth rates will remain high, gradually reaching a potential 6-7% beyond the forecast period. The balanced growth rates of the Tajik economy exceed the average for the region due to the catch-up nature of development and the high rate with which the country's population is increasing. The successful implementation of opportunities associated with favorable structural factors is facilitated by the authorities' policies of energy development, transport and other infrastructure, as well as in industrial development.