ÐÓ°ÉÂÛ̳

Country Context

Over the last decade, Tajikistan experienced economic growth rate averaging above 7.1%. The economy grew by 8.4 % in 2024, driven by remittance inflows. Strong growth, higher wages, and international remittances helped reduce the number of people living in poverty from 32% of population in 2009 to an estimated 9.1% in 2024 (at the international poverty line of $3.65 a day). By national standards for poverty measurement, 20.4% of the population were living in poverty in 2023. 

Despite significant progress, Tajikistan remains vulnerable to external shocks due to its dependency on remittances, an undiversified economy, and high risk of debt distress. Remittances amounted to about 49% of GDP in 2024, driving private consumption and financing imports.  

Tajikistan has enormous growth potential due to a young and growing population as well as its potential in sectors like agriculture and food processing, water and hydropower, mineral resources, and tourism The Government of Tajikistan has set an ambitious target¡ªto more than double or triple domestic incomes between 2016 and 2030¡ªwhich will require a new growth model centered around a dynamic private sector. Boosting growth and jobs requires structural reforms, improved competition, investment climate, and access to finance, energy sector efficiency, trade, transport and digital connectivity, and human capital development.

Strategy

Tajikistan joined the International Bank for Reconstruction and Development (IBRD) and International Finance Corporation (IFC) of the ÐÓ°ÉÂÛ̳ Group in 1993, and the International Development Association (IDA) in 1994. Since then, IDA has provided over $3.3 billion in grants and highly concessional credits to support Tajikistan¡¯s efforts to reduce poverty and improve people¡¯s lives.  

The Country Partnership Framework (CPF) for 2019-2025 supports Tajikistan¡¯s efforts to complement its remittance-financed, import-reliant economic model with a focus on boosting private-sector development and exports. The portfolio has expanded rapidly during the current CPF period. As of April 2025, the active portfolio includes 26 IDA-funded investment lending projects with a net commitment of $1.91 billion, of which 23 are national operations with the net IDA commitments of $1.7 billion and three are regional operations purely focused on Tajikistan ($200 million). The portfolio¡¯s largest share is in the energy sector (50.3%), followed by water (9%), transport (7%), education and agriculture (6% each). 

On average, projects approved by the ÐÓ°ÉÂÛ̳ Board for Tajikistan over FY21-25, amounted to $1.3 billion (including development policy operations, trust funds and regional projects fully allocated to Tajikistan). The current project portfolio includes investments in energy, water, transport, agriculture, disaster risk management, health, education, social protection, digital connectivity, as well as institutional capacity building of tax, finance, and statistics bodies.

The International Finance Corporation (IFC) is gradually growing its program in Tajikistan with a total investment portfolio of more than $90 million supporting seven clients in advancing their businesses in diverse sectors, such as financial institutions, manufacturing, agriculture and services, and infrastructure development.

ÐÓ°ÉÂÛ̳ Group is currently preparing a new Country Partnership Framework (CPF) for Tajikistan, which will outline priority areas for supporting the country over the next several years. This CPF will aim to address key development challenges with a focus on job creation, promoting inclusivity, competitiveness, and resilience.

Economy

Recent Economic Developments

Tajikistan¡¯s economy grew by 8.4% in 2024, supported by remittance-driven domestic demand and growth in industry (20%) and agriculture (10.6%). 

Under Lower Middle-Income Countries (LMIC) poverty line of $3.65 a day, the poverty rate declined to 9.1% in 2024 from 11.1% in 2023. According to the Listening to Tajikistan survey, the share of households receiving remittances increased by 4 percentage points to 21% in 2023 and 2024. 

The trade deficit widened due to increased import demand and declining precious metal exports. Foreign direct investment (FDI) inflows remained low, at 1.3% of GDP (compared to 0.8% in 2023). The central bank accumulated international reserves reaching $4.6 billion by end-December 2024 and covering more than seven months of imports. 

Prudent monetary policy and a stable exchange rate have ensured a low inflation rate of 3.4% in 2024 (from 3.7% in 2023). Revenues declined to 27.7% of GDP in 2024 (from 29.6% in 2023), due to lower externally financed public investment grants and nontax collections. Expenditures fell slightly to 29.1% of GDP (compared to 30.6% in 2023). The fiscal deficit was largely financed with development partner concessional loans. Tajikistan is at high risk of debt distress, with a public debt equivalent to 25.4% of GDP.

Economic Outlook

In the context of rising global uncertainty, Tajikistan¡¯s economic growth has been cautiously forecast at 6.5% in 2025, supported by private consumption and the recovery of precious metal exports. Inflation is expected to rise slightly to 3.9% in 2025 and gradually move toward the central bank¡¯s medium-term target of 5% (+/-2). The poverty rate at $3.65 a day poverty line is expected to drop to 8.2% in 2025.

Under the baseline, Tajikistan¡¯s external position is expected to remain robust despite normalization of remittance flows as Russia¡¯s economic growth slows, including due to lower oil price outlook, and migration policies tighten. 

Elevated precious metals prices will likely support exports, while easing food and oil prices reduce the import bill, thus narrowing the trade deficit. Global uncertainty has worsened an already weak investment environment due to domestic challenges. The fiscal deficit is projected to remain below 2.5% of GDP over the medium term. 

The outlook faces risks from global policy uncertainty, intensifying trade protectionism, regional armed conflicts, and lagging structural reforms domestically. To raise potential growth, the authorities will need to expedite reforms in stimulating private sector development and public sector efficiency and accountability, while cultivating economic resilience to climate change.