Tajikistan sees 0.6pct inflation

By Kamila Aliyeva

The National Bank of Tajikistan reported that the level of inflation in Tajikistan amounted to 0.6 percent in January 2017.

The annual inflation rate from January 2016 to January 2017 amounted to 5.3 percent. The Bank reported that the price hikes were recorded over food, non-food products, as well as paid services.

The government of Tajikistan earlier reported that it plans to keep the inflation at 7 percent in 2017. Last year, the figure was 6.1 percent, which was 0.9 percent lower than the predicted level. Thus, the average monthly inflation rate last year was 0.5 percent.

Despite a challenging external environment, Tajikistan’s economy recovered after a slowdown of 6 percent in 2015, to an estimated 6.9 percent in 2016. The sources of growth shifted from services to industry and construction with modest contributions by agriculture, according to WB country report. 

The U.S. dollar value of remittances, about 80 percent of which comes from Russia, fell by 33 percent in 2015 and continued to reduce by around 21 percent through mid-2016. It is connected with the sharp depreciation of the Russian ruble and tightening legislation on migration in the Russian Federation since January 2015.

The Bank predicted economic growth to slow down in 2017 as domestic vulnerabilities increase. Poverty reduction is expected to continue over the medium term, although at a slower pace than in recent years.

The government of the country has set goals to be reached by 2020 which are to double GDP, to reduce poverty to 20 percent, and to expand the middle class.

The country also  adopted a new National Development Strategy covering 2016-2030, which envisages Tajikistan transforming from a mainly agrarian based economy to an industrialized economy.

To achieve these goals, Tajikistan needs to implement a reform designed to reduce the role of the state and raise that of the private sector in the economy, thus increasing private investment and generating more jobs, to modernize and improve the efficiency and social inclusiveness of basic public services, and to enhance the country’s connectivity to regional and global markets.