Tajikistan : Strong Growth, Rising Risks

Tajikistan : Strong Growth, Rising Risks

Tajikistan's economy grew at higher-than-projected rate of 7.4 percent in 2013 on the back of record high inflow of remittances. High remittances fueled private consumption and investment. Meanwhile, weaker external demand and lower prices for...

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Bibliographic Details
Main Author:	World Bank
Format:	Economic Updates and Modeling
Language:	English en_US
Published:	Washington, DC 2014
Subjects:	ACCOUNTING ACCOUNTING STANDARDS AGRICULTURAL OUTPUT AMORTIZATION ARREARS AUDITS AVERAGE EXCHANGE RATE BANKING SECTOR BANKING SYSTEM BORROWER BUDGET DEFICIT BUDGETING BUFFERS CAPACITY CONSTRAINTS CAPITAL ADEQUACY CAPITAL FORMATION CAPITAL GOODS COAL COMPETITIVENESS CONSOLIDATION CONSUMER BASKET CONSUMER GOODS CONSUMER PRICE INDEX CONSUMER PRICE INFLATION CONSUMPTION GROWTH CPI CREDIT DECISIONS CREDIT GROWTH CREDIT INFORMATION CREDIT INFORMATION BUREAU CREDIT RISK CREDITOR CREDITORS CURRENT ACCOUNT CURRENT ACCOUNT BALANCE CURRENT ACCOUNT DEFICIT CUSTOMS DUTIES CUSTOMS DUTY DEFAULT RATES DEMOGRAPHICS DEPOSIT DEPOSITS DEVALUATION DEVELOPMENT BANK DOMESTIC DEMAND DOMESTIC ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC DEVELOPMENTS ECONOMIC EFFICIENCY ECONOMIC GROWTH ENVIRONMENTAL EQUIPMENT EXCHANGE RATE EXCHANGE RATE MOVEMENTS EXCHANGE RATE POLICIES EXPENDITURE EXPENDITURES EXPORT COMMODITIES EXPORT GOODS EXPORT GROWTH EXPORT MARKET EXPORT MARKETS EXPORT PERFORMANCE EXTERNAL DEBT EXTERNAL DEMAND EXTERNAL SHOCKS FINANCIAL DEVELOPMENT FINANCIAL INFORMATION FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIATION FINANCIAL MARKETS FISCAL BALANCE FISCAL DEFICIT FISCAL POLICY FIXED INVESTMENT FLOATING EXCHANGE RATE FLOATING EXCHANGE RATE REGIME FOOD PRICE FOOD PRICES FOREIGN CURRENCY FOREIGN CURRENCY RESERVES FOREIGN DEBT FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN EXCHANGE EARNINGS FOREIGN INVESTMENTS FOREIGN RESERVES FORESTRY FORGIVENESS FUTURES FUTURES MARKETS GLOBAL MARKET GLOBAL MARKETS GOVERNANCE ISSUES GOVERNMENT DEBT GOVERNMENT DEBT MARKET GOVERNMENT EXPENDITURES GOVERNMENT REVENUE GOVERNMENT REVENUES GOVERNMENT SPENDING GROSS CAPITAL FORMATION GROSS DOMESTIC PRODUCT GROWTH RATE GROWTH RATES HUMAN CAPITAL HUMAN DEVELOPMENT IMMOVABLE PROPERTY IMPORT IMPORT GROWTH IMPORTS INCOME LEVEL INFLATION INFLATION DYNAMICS INFORMATION ON BORROWERS INFORMATION SYSTEM INFRASTRUCTURE DEVELOPMENT INTEREST RATE INTEREST RATES INTERNATIONAL FINANCE INTERNATIONAL PRICES INTERNATIONAL RESERVES INTERNATIONAL TRADE INVENTORY INVESTING INVESTMENT BANKS INVESTMENT EXPENDITURES INVESTMENT PROJECTS LABOR FORCE LABOR MARKET LABOR MARKETS LABOR PRODUCTIVITY LEGAL FRAMEWORK LENDERS LIQUIDITY LOAN AGREEMENTS LOAN PROCESSING LOAN RATE LOCAL CURRENCY LOCAL MARKET MACROECONOMIC INDICATORS MACROECONOMIC MANAGEMENT MAJOR CURRENCIES MARKET CONCENTRATION MARKET DEVELOPMENTS MARKET REFORMS MARKET REQUIREMENTS MATURITY MICROFINANCE MONETARY POLICY NATIONAL BANK NOMINAL DEPRECIATION NOMINAL DEVALUATION NON-PERFORMING LOAN NON-PERFORMING LOANS NONPERFORMING LOANS NPL PENSIONS POPULATION GROWTH POVERTY REDUCTION PRIVATE CONSUMPTION PRIVATE INVESTMENTS PRODUCERS PRODUCTION COSTS PRODUCTIVITY GROWTH PUBLIC DEBT PUBLIC EXPENDITURE PUBLIC EXPENDITURES PUBLIC FINANCE PUBLIC INVESTMENT PUBLIC SPENDING RATE OF GROWTH REAL EFFECTIVE EXCHANGE RATE REAL WAGE GROWTH REAL WAGES REGISTRATION SYSTEM REGULATORY REFORMS REMITTANCE REMITTANCES RESERVES RESOURCE MANAGEMENT RETURN RETURN ON ASSETS RETURNS RISK MANAGEMENT SECTOR REFORM SECTOR REFORMS SHORTFALL SLOWDOWN SLOWDOWNS SOFT BUDGET CONSTRAINTS STABLE EXCHANGE RATE STABLE GROWTH STOCKS STRUCTURAL REFORMS SUPPLY SIDE SURPLUS TAX TAX CODE TOTAL DEPOSITS TOTAL EXPORT TOTAL EXPORTS TOTAL IMPORT TOTAL IMPORTS TRADE ACCOUNT TRADE BALANCE TRADE BARRIERS TRADE DEFICIT TRADE FACILITATION TRADING TRADING PARTNERS TRANSMISSION MECHANISM TRANSPARENCY TRANSPORTATION COSTS TREASURIES TREASURY UNCERTAINTY UNEMPLOYMENT UNEMPLOYMENT RATE VULNERABILITY TO SHOCKS WAGES WAREHOUSE WORLD DEVELOPMENT INDICATORS WORLD ECONOMY WORLD TRADE
Online Access:	http://documents.worldbank.org/curated/en/2014/04/19401048/tajikistan-strong-growth-rising-risks http://hdl.handle.net/10986/18659

Description
Summary:	Tajikistan's economy grew at higher-than-projected rate of 7.4 percent in 2013 on the back of record high inflow of remittances. High remittances fueled private consumption and investment. Meanwhile, weaker external demand and lower prices for aluminum and cotton adversely affected exports and resulted in a widening of the current account deficit. Inflation was reduced to a record low because of the limited increase in food prices and stable exchange rate. The fiscal deficit widened because of higher investment expenditures and a reduction in nontax revenues. The overall fiscal picture is likely to be different than official statistics suggests because of soft budget constraints on state-owned enterprises, continued directed lending by banks, and other quasi-fiscal risks. The economy remains vulnerable to shocks, and the fiscal and debt position remains weak because of the country's remittance-driven growth model, narrow export base, high dependence on concessional financing, and large infrastructure. In addition, amortization of existing foreign debt is increasing sharply. Real wage growth in excess of productivity growth further deteriorated the country competitiveness. Weak governance and financial sector accountability and the poor business climate hold back development in the financial sector and in the government debt market. The government is aiming for at least 7.5 percent growth in the medium term as well as a reduction in the poverty headcount to 30 percent by 2015 and further to 20 percent by 2020. In order to meet these objectives, the government needs to accelerate reforms aimed at improving the institutional environment for private-sector-led growth and job creation. Future growth and poverty reduction will depend on its success in overcoming the binding constraints to diversified development and in reducing the costs and increasing the profitability of potential private investments.

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