Tajikistan Business Economy - The Times Of Central Asia

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Tajikistan Predicts Economic Slowdown Amid Declining Remittances

Tajikistan's economic growth is projected to decelerate to 7.5% in 2025, largely due to weakening domestic demand, according to the latest regional economic review by the Eurasian Fund for Stabilization and Development (EFSD). Migrant Remittances: A Key Factor The anticipated slowdown is primarily attributed to a decline in remittances from labor migrants, which have historically formed a substantial share of Tajikistan’s GDP. EFSD analysts forecast that from 2025 to 2027, the volume of transfers will gradually normalize after peaking between 2022 and 2024. Despite this decline, the EFSD maintains that Tajikistan’s balance of payments will remain stable, helped in part by reduced capital outflows, including foreign currency purchases. Previously, the World Bank reported that migrant remittances accounted for 45% of the country’s GDP in 2024, the highest proportion globally. By comparison, remittances made up 24% of GDP in Kyrgyzstan and 14% in Uzbekistan. The Asian Development Bank (ADB) expects this share to fall to 37% in 2025. Inflation Pressures Rise EFSD economists also warn of mounting inflationary pressures. Inflation is projected to approach the upper limit of the National Bank of Tajikistan’s target corridor, 5% with an acceptable deviation of ±2 percentage points. Over the medium term, inflation is expected to stabilize within the target range. Food prices remain the primary risk to price stability, the EFSD cautioned. Exports, External Risks, and Trade Barriers The ADB has also published a forecast supporting a more restrained outlook, highlighting falling global prices for Tajikistan’s key exports, metals and agricultural goods, including aluminum, as an added drag on growth. Additionally, regional trade barriers are posing challenges. Uzbekistan recently raised import duties on Tajik cement, a move seen by analysts as part of a broader trend of protectionist policies in neighboring countries. External conditions are also exerting pressure. Economic slowdowns in Russia and China, Tajikistan’s primary trading partners, could suppress both export revenue and remittances, the majority of which come from migrant workers in Russia. GDP Projections and Sector Breakdown According to the ADB’s baseline scenario, Tajikistan’s GDP growth is expected to slow to 7.4% in 2025 and 6.8% in 2026. In contrast, Tajik authorities aim to maintain growth at no less than 8%. In 2024, the economy grew by 8.4%, a 0.1 percentage point increase over the previous year. GDP totaled 153.4 billion somoni (approximately $14 billion). The sectoral composition of GDP included agriculture (22.8%), industry (16.9%), trade (15.2%), transportation (9.3%), construction (8.1%), taxes (9.4%), and other services (18.3%). Despite the projected slowdown, ADB experts remain cautiously optimistic. They cite sustained investment in energy and industrial sectors, expanded agricultural and service output, and continued, albeit diminished, remittance inflows as key factors that will support Tajikistan’s economic momentum.

Business & Economy Tajikistan International Affairs Tajikistan Tajikistan Business Economy

Jewelry Factory Opens in Tajikistan with Chinese Investment

A new jewelry factory operated by China-Tajikistan Mining Industry Company LLC officially opened in Dushanbe on April 10. The inauguration ceremony was attended by President Emomali Rahmon of Tajikistan. Construction of the facility began in 2023. The complex now includes modern production facilities and a two-story gold sales center. Utilizing the latest Chinese technology, the factory is capable of processing up to one ton of gold and 30 tons of silver annually. It will also produce a variety of goods, including jewelry, home decorations, and household items. On the same day, President Rahmon laid the foundation stones for two additional jewelry factories, also backed by Chinese investment. One will be operated by TBEA Dushanbe Mining Industry Company LLC, and the other by Pakrut Company LLC. Both are slated for completion within a year and will be located in Dushanbe. China currently controls over 75% of Tajikistan’s gold production. While Chinese investment has helped develop Tajikistan’s mining infrastructure, it has also raised concerns. Critics point to potential environmental risks and labor rights issues associated with the expanding influence of Chinese firms in the sector.

Business & Economy Tajikistan Tajikistan Business Economy

ADB Forecasts Steady Economic Growth for Tajikistan Through 2026

The Asian Development Bank (ADB) projects that Tajikistan will sustain strong economic growth over the next two years, according to the bank’s Asian Development Outlook 2025 released in April. Robust Growth Ahead Tajikistan’s gross domestic product is forecast to grow by 7.4% in 2025 and 6.8% in 2026. This growth is expected to be fueled by significant investments in the energy and industrial sectors, solid domestic demand, and an increasingly dynamic private sector. While these figures mark a slight decline from the impressive 8.4% GDP growth recorded in 2024, one of the highest in the region, the ADB highlights the need for deeper structural reforms. In particular, digital transformation and the expansion of e-governance are deemed critical to ensuring long-term, sustainable development. Digital Transformation: Opportunities and Hurdles ADB’s Resident Representative in Tajikistan, Ko Sakamoto, emphasized the strategic importance of digitalization. “We welcome the government’s prioritization of digital transformation as a key driver of development. We stand ready to support efforts to overcome persistent barriers, including a lack of investment,” he said. Despite widespread mobile phone usage, Tajikistan ranks 139th globally in mobile internet speed. However, digital engagement is on the rise: in the first half of 2024, the number of registered digital wallets hit 10.4 million, and non-cash transactions rose 16.2% year-on-year. ADB experts recommend that Tajikistan focus on developing a robust digital infrastructure to broaden access to public services. The widespread integration of digital technologies in governance and business is seen as vital to industrial modernization and improving overall quality of life. Inflation, meanwhile, is projected at 5.0% in 2025 and 5.8% in 2026. Key inflationary pressures include rising consumer lending, salary increases for public sector employees, and higher utility tariffs. Continued Partnership and Support The Asian Development Bank, a major multilateral financial institution supporting sustainable and inclusive development across Asia and the Pacific, has been working with Tajikistan since 1998. Over that time, the country has received more than $2.7 billion in assistance, including $2.2 billion in grants. These funds have supported vital infrastructure projects in transportation and energy, as well as climate resilience and social development programs. Established in 1966, ADB has 69 member countries, 49 of which are from the region. The bank continues to be one of Tajikistan’s principal development partners, offering innovative financing tools and strategic cooperation to enhance economic sustainability and improve livelihoods.

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Unpacking the Effects of Trump’s Tariffs on Central Asia

Trade analysts across Central Asia generally agree that the immediate impact of the United States' tariff policy on the export dynamics of their nations will likely be minimal, as observed in past experiences, except for Kazakhstan. However, there is a palpable concern regarding potential unforeseen consequences arising from a broader global trade conflict. Notably, the timing of the Trump administration's announcement regarding global tariffs on imports coincides with a period when Central Asian countries are actively working to enhance their regional trade relationships. This new tariff policy raises significant doubts about the authenticity of recent U.S. efforts to promote increased trade and investment in the region. The mixed signals coming from Washington may lead Central Asian leaders to re-evaluate their current trade partnerships, especially as they consider the benefits of strengthening ties with China and Russia against the attractiveness of expanding commerce with the United States. Similarly, the European Union may find an opportunity to improve its position, while India could leverage the Chabahar route (a multi-modal transportation route connecting India, Iran, Afghanistan, and potentially Central Asia and Europe). It is worth noting that the market is primarily situated in Asia, and this alternative could have adverse long-term effects on the United States. Kazakhstan, acknowledged as the United States’ largest trading partner in Central Asia, is poised to face significant repercussions from introducing new tariffs set at 27%. In 2024, trade relations between the U.S. and Kazakhstan reached an impressive total of $3.4 billion, with $1.1 billion in U.S. exports to Kazakhstan and $2.3 billion in imports from Kazakhstan to the U.S. However, a statement from the Kazakh Trade Ministry indicates that exports to the U.S. primarily consist of crude oil, uranium, silver, and other raw materials, all exempt from these tariffs. In 2024, Kazakhstan exported only $95.2 million worth of goods, which will now incur surcharges – a relatively modest figure compared to the country’s overall foreign trade turnover of $141.4 billion. Trade analysts suggest that Kazakhstan has little cause for concern, viewing this situation more as a psychological impact than a serious economic threat. Resource-driven Central Asian economies, such as Kazakhstan, may even find enhanced opportunities in the expanding Asian market. Trade dynamics in Central Asia reveal a complex landscape, especially concerning the United States. In 2024, Uzbekistan managed to export a modest $42.4 million worth of goods to the US, a small fraction considering its total foreign trade turnover, which reached an impressive $66 billion for that year. This stark contrast highlights the limited engagement of Uzbekistan in the American market. With its total trade turnover of $16 billion in 2024, Kyrgyzstan similarly struggled with exports to the US, which amounted to merely $16.7 million. This reflects a broader trend where Central Asian economies exhibit low volume exports to the US, suggesting significant barriers or challenges in establishing a foothold in this lucrative market. Tajikistan's economic performance presented an even more sobering picture. Recording a total trade turnover of $8.9 billion, the country achieved only $4.6 million...

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Kyrgyzstan and Tajikistan Move Closer to Electricity Exports to South Asia

Kyrgyzstan and Tajikistan have officially launched the 500 kV Datka-Sughd overhead power transmission line, a key component of the CASA-1000 (Central Asia-South Asia) electricity transmission project. The initiative is designed to export surplus summer electricity from the two Central Asian countries to Afghanistan and Pakistan. The 485-kilometer line, which connects the Datka substation in Kyrgyzstan with the Sughd substation in Tajikistan, was inaugurated on March 31 during Kyrgyz President Sadyr Japarov’s visit to the Tajik city of Khujand. Tajik President Emomali Rahmon also attended the ceremony. The new line enables bidirectional power flows, significantly enhancing the resilience and stability of Central Asia’s power grid. According to Kyrgyzstan’s Ministry of Energy, both Kyrgyzstan and Tajikistan have completed their respective infrastructure components of the CASA-1000 project. Project Progress and Timeline In Pakistan, construction is expected to be completed by August 2025. In Afghanistan, where work had stalled, construction has now resumed. Over 95% of the necessary materials have already been delivered to the country. Full completion of the Afghan section and the start of commercial operations are expected in 2027. The CASA-1000 project, with a total cost exceeding $1.2 billion, is financed by the World Bank, the European Investment Bank, the European Bank for Reconstruction and Development, the Islamic Development Bank, and other international partners. The Kyrgyz and Tajik sections alone accounted for approximately $544 million, or 45.3% of the total project budget. Once fully operational, CASA-1000 will have the capacity to transmit up to 11 billion kilowatt-hours of electricity per year. Economic and Regional Impact Tajikistan and Kyrgyzstan are expected to jointly export up to 5 billion kilowatt-hours of green electricity annually to Pakistan, roughly 5% of Pakistan’s total electricity consumption. The projected revenue from these exports is over $250 million per year for the two countries. The successful implementation of CASA-1000 not only promises economic benefits for Central Asia but also marks a significant step in regional energy cooperation, renewable energy deployment, and cross-border infrastructure integration.

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Tajikistan’s Green Deal: EBRD Launches Sustainability Pilot Projects

On April 1, the European Bank for Reconstruction and Development (EBRD) inaugurated two demonstration sites under the Tajikistan Green Economy Financing Facility (GEFF II) in the town of Bokhtar. The initiative promotes innovation in sustainable energy and agriculture, backed by funding from South Korea, Austria, and the Green Climate Fund. The total program budget is $50 million. Bringing Energy Efficiency to Life The first site, located at the MoDO Khumo branch in Bokhtar, features a hybrid solar photovoltaic system combining solar panels with energy storage. This technology ensures a stable power supply even during periods of low solar activity. Real-time data on electricity generation and consumption is displayed in the customer area, helping to raise public awareness of sustainable energy practices. The second site, at the Tanzila dekhkan farm in Vakhsh district, showcases how green technologies can boost crop yields and reduce environmental impact. The installation includes: Drip irrigation systems that save up to 70% of water; Solar panels for off-grid electricity; Biogas units using organic waste; Vertical farming in compact spaces. These solutions aim to enhance agricultural productivity and improve farmers' incomes. Strategic Development with the EBRD GEFF II also prioritizes gender equality, offering targeted support to women entrepreneurs seeking green financing for sustainable business ventures. The demonstration sites form part of the EBRD’s broader strategy to promote sustainable development across Tajikistan. Additional pilot locations are planned to showcase further environmentally friendly technologies. EBRD’s Broader Footprint in Tajikistan Established in 1991, the EBRD provides financial and technical support to nearly 40 countries for economic and structural reforms. In Tajikistan, the bank remains a key investor, having committed over €1 billion across 183 projects. Notable EBRD-supported initiatives include: Dushanbe Infrastructure Modernization - €28.45 million to improve roads and a bridge over the Varzob River; Dangara-Guliston Road Upgrade - €38 million for roadworks and infrastructure for electric vehicles; CLIMADAPT - $10 million to help farmers and businesses adopt climate-resilient technologies; Kayrakkum Hydroelectric Plant Modernization - $88 million to boost energy efficiency and support climate adaptation. These investments are helping Tajikistan build climate resilience, modernize infrastructure, and create sustainable pathways for regional development.