By January 1, 2018, Tajikistan’s public debt has reached nearly 3.67 billion U.S. dollars and the country’s public debt-to-GDP ratio has reached 51.4 percent.
Public debt (also known as government debt, national debt and sovereign debt) is the debt owed by a government. Public debt can be categorized as internal debt (owed to lenders within the country) and external debt (owed to foreign lenders). Another common division of public debt is by duration until repayment is due. Short term debt is generally considered to be for one year or less, long term is for more than ten years. Medium term debt falls between these two boundaries. A broader definition of public debt may consider all government liabilities, including future pension payments and payments for goods and services which the government has contracted but not yet paid.
Governments create debt by issuing securities, government bonds and bills. Less creditworthy countries sometimes borrow directly from international financial institutions.
Tajikistan’s public debt includes the country’s external debt amounting to some 2.9 billion somoni and its internal debt amounting to some 770 million U.S. dollars.
Recall, Tajikistan’s external debt-to-GDP ratio reached is 40.3 percent.
Meanwhile, the Ministry of Finance says Tajikistan’s internal debt has reached 6.8 billion somoni (equivalent to some 770 U.S. dollars) and internal debt-to-GDP ratio reached 11.1 percent.
In a report released at a news conference in Dushanbe, the Minister of Finance Faiziddin Qahhorzoda, revealed on February 16 that China remains Tajikistan’s largest creditor. Tajikistan now reportedly owes more than 1.2 billion to the export-Import Bank of China (China Eximbank).
Besides, Tajikistan now also owes 318 million U.S. dollars to the World Bank, 278 million U.S. dollars to the Asian Development Bank and 112 million U.S. dollars to the Islamic Development Bank.
Minister Qahhorzoda noted that Tajikistan's national budget last year allocated 147 million U.S. dollars for payment of principal debt and debt interest.
Despite unsettled debts, Tajikistan is going to borrow another 200 million U.S. dollars this year.
“This year, we plan to borrow 200 million U.S. dollars,” said the minister. “We attract loans from the international financial institutions that are permanent partners of Tajikistan. The financial capabilities of the country allow fulfilling its obligations on attracting loans in full volume and in in proper time.”
Tajikistan intends to borrow another nearly 850 million U.S. dollars within the coming three years under the national foreign-borrowing program projected for 2018-2020: 196.5 million U.S. dollars (USD) in 2018; 295.9 million USD in 2019; and 354.7 million USD in 2020.
Meanwhile, the World Bank analysts note that the loans for public investment projects (particularly from China), the issuance of domestic debt to support the energy sector (TJS 530 million), and the issuance of a US$500 million Eurobond in September last year are the primary drivers of the rise in Tajikistan’s external debt.
Tajikistan: Heightened Vulnerabilities, Despite Sustained Growth, a report released by the World Bank on December 28, 2017 says the recently updated Debt Sustainability Analysis (DSA) suggests that Tajikistan’s debt distress level rose from moderate to high in the baseline scenario as several important indicators passed indicative thresholds. The latter reportedly reflects the country’s weakened ability to earn foreign exchange for servicing its external debt which started increasing at an accelerated pace.
The report says the Tajik authorities intend to revise the medium-term debt strategy (MTDS) and relax the domestic fiscal rule on the debt ceiling by increasing it from the current 40 percent of GDP to 60 percent of GDP.
