DUSHANBE (TCA) — Tajikistan’s medium-term economic growth is expected to stabilise at around 7%, the Macroeconomic Review prepared by the Directorate for Research at the Eurasian Development Bank (EDB) suggests.
Alexey Kuznetsov, Head of Economic Analysis at the EDB, points out that in 2018 the country achieved the highest growth rates since 2014, with its GDP having increased by 7.3% after 7.1% in 2017. The key drivers of economic growth in 2018 were investment and consumer activity. The forecast medium-term economic growth remained almost unchanged, compared to the previous assessment made in late 2018. The review suggests that the implementation of major infrastructure projects initiated by the public sector will continue over the forecast period. The medium-term economic growth will be gradual, at levels close to forecasts.
At the beginning of 2018, the National Bank of Tajikistan cut its refinancing rate from 16.0% to 14.0%. However, as unexpected external shocks affected the volatility of the EDB member countries’ national currencies, inflation risks have again built up and the monetary authorities suspended further decreases in the refinancing rate.
The review states that in the second half of 2018 inflation was within the target corridor of 7% (±2 percentage points) and amounted to 5.4% by year-end. Inflation was influenced by global food prices, the base effect in the horticultural sector, as well as transport and energy tariff policies.
The Bank’s analysts forecast inflation in 2019 to decrease to 5.6% (in December 2018, the indicator was expected to reach 7.0% by year-end). The forecast has been adjusted for expected regional food prices revised in late 2018–early 2019.
The EDB believes that medium-term inflation will depend on global food markets. According to its forecast, world food prices will begin to recover during the first six months of 2019 and stabilise by early 2020, influencing the dynamics of the consumer price index in Tajikistan.
