The Asian Development Bank (ADB) said it expects Tajikistan’s gross domestic product (GDP) growth to rebound to 5% in 2021 and to 5.5% in 2022, up from the 4.5% growth reported in 2020. Its expectations were published in the ADB Asian Development Outlook 2021. 

The ADB is predicting that COVID-19 pandemic restrictions will ease in Tajikistan’s main trading partners, leading to a recovery in overseas demand, remittances and foreign direct investment. Inflation, which reached 9.4% in 2020, is projected to slightly slow to 9% in 2021 with more stable global food prices despite currency pressures from ruble depreciation, greater exchange rate flexibility, expected increases in pensions and stipends as well as higher electricity tariffs.

“While we are cautiously optimistic on growth, much will depend on the speed of the [coronavirus] vaccination program and the full restoration of regular flights with Tajikistan’s main trading partners,” said ADB country director for Tajikistan Shanny Campbell. “Improving performance in major state-owned enterprises (SOEs) will also help to enhance Tajikistan’s fiscal sustainability.”

The report noted the need to boost the performance of SOEs as the state-run firms play an important role in public services, job creation and socioeconomic development. Tajikistan has over 1,000 SOEs but the majority of them have incurred losses for decades, only bringing about significant loan default and insolvency risks. Last year, Tajikistan saw 12 of its 27 largest SOEs incur combined losses amounting to 8.2% of GDP.

The report added that, while the Tajik government has made progress in strengthening SOE oversight, transparency and operational efficiency, more reforms are needed. That should include introducing corporate governance principles, merit-based recruitment of top managers and evaluating key performance indicators to assess management performance, the report noted.