Despite a considerable amount of debts accumulated, the Tajik government is not going to discontinue the practice of foreign borrowing, and is planning to borrow more than 1 billion U.S. dollars (USD) within the next three years.
The government has adopted the national program for foreign borrowing for 2021 and forecast indicators for 2023-2024. Under this program, Tajikistan intends to borrow 292.8 million USD in 2022, 360 million USD in 2023 and 365.4 million USD in 2024.
The document notes that 230.2 million USD in loans have gone this year toward financing the national investment projects.
The program, in particular, says that “thanks to the constant efforts of the government on restructuring the debt and ensuring the stable growth of the country’s economy, the external debt situation has improved in recent years.“
As of October 1, 2021, Tajikistan’s public debt has amounted to 3.8 billion USD, which is equal to 44.6 percent of the country’s gross domestic product (GDP), including external borrowings amounting to about 3.3 billion USD and internal debt amounting to 500 million USD. .
Tajikistan has latterly crossed a troubling psychological threshold by having its external debt reach 43 percent of GDP, thereby surpassing the 40 percent many international economists deem sustainable for developing economies.
Tajikistan national program of foreign borrowings now includes 62 loan agreements, including 54 active loan projects and 8 loan agreements at the draft stage.
Over the first nine months of this year, Tajikistan has reportedly signed four loan agreements in a total amount of about 63 million U.S. dollars. All these agreements have been concluded with the European Bank for Reconstruction and Development (EBRD).
In 2022-2024, Tajikistan reportedly earmarks a total 778.0 million USD for servicing external debt, including 243.5 million USD earmarked for 2022, 254.1 million USD earmarked for 2023 and 281.3 million USD earmarked for 2024.
The Ministry of Finance (MoF) stated in January this year that it had earmarked 2.3 billion somonis (equivalent to 202 million U.S. dollars) for servicing foreign debt in 2021. Of that total, 1.5 billion somonis was reportedly reserved for repayment of principal, with the rest going toward covering interest.
The main donors of Tajikistan are the Asian Development Bank (ADB), the World Bank (WB), the European Bank for Reconstruction and Development (EBRD) and the Islamic Development Bank (IsDB).
The international financial institutions provide loans for a long-term period (for 20-40 years) with grace period of 4 to 10 years and annual interest rate from 0.75 to 2.0 percent.
