Over the first three months of this year, Tajikistan’s external debt has reportedly decreased by 200,000 U.S. dollars (USD).
As of April 1, Tajikistan’s external debt amounted to 3.243.5 billion USD (US$200,000 reduction compared to December 31, 2020), according to the National Bank of Tajikistan.
Government borrowing, which ensures the performance of public services, reportedly accounted for 96.6 percent of the country’s external debt – 3.132.2 billion USD.
Debts with a state guarantee in the structure of external debt amount to 97.4 million U.S. dollars.
Debts of the National Bank of Tajikistan to the International Monetary Fund (IMF), China and Islamic Development Bank (IsDB) total 13.8 million U.S. dollars.
Tajikistan has crossed a troubling psychological threshold by having its external debt reach 41 percent of gross domestic product (GDP), thereby surpassing the 40 percent many international economists deem sustainable for developing economies.
This year, Tajikistan has earmarked about 1.5 billion somonis (equivalent to US$133 million at the exchange rate for February 23, 2021) to service its external debt.
Recall, Tajikistan’s external debt rose 300 million U.S. dollars in a year to December 31, 2020, reaching 3.2 billion U.S. dollars (41 percent of the gross domestic product).
In 2020, Tajikistan spent 190 million U.S. dollars servicing its external debt, according to the Ministry of Finance (MoF) Secretariat. Of this amount, US$124 million were spent to service the principal and US$66.2 million were spent to service interest of the debt.
The size of the country’s external debt last year increased mainly due to the attraction of a preferential loan in the amount of US$189.5 million from the International Monetary Fund (IMF) and a US$50 million loan from the Eurasian Fund for Stabilization and Development in May last year.
China remains the main creditor of Tajikistan. Beijing last year owned more than US$1.2 billion.
Tajikistan’s large-scale borrowing from China started around 2006. According to Eurasianet, Dushanbe and Beijing signed their last major loan deal in 2014, with the project – Stage 2 of the Dushanbe-2 combined heat and power (CHP) plant completed in 2016. Despite extensive Chinese FDI in mining and other ventures with commercial potential, there is reportedly no major project currently under construction in Tajikistan directly financed by Eximbank.
Tajikistan pleaded for relief from its international creditors and has already received positive feedback from China. China has suspended debt repayments from Tajikistan.
Debts due to placement of government bonds (Eurobonds) in international financial markets amount to US$500 million.
There are also comparatively large debts to the World Bank, Asian Development Bank, Islamic Development Bank and IMF.
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 562 million U.S. dollars this year, 459.7 million U.S. dollars in 2022, and 246.8 million U.S. dollars in 2023.
