As of July 1, 2021, Tajikistan’s external debt has amounted to about 3.256 billion U.S. dollars, according to the Ministry of Finance (MoF).
Government borrowing, which ensures the performance of public services, reportedly accounted for about 97 percent of the country’s external debt – 3.151 billion U.S. dollars.
Debts with a state guarantee in the structure of external debt have amounted to 96.3 million U.S. dollars.
Debts of the National Bank of Tajikistan to the International Monetary Fund (IMF), the Islamic Development Bank (IsDB) and China have totaled 9.3
In January-June, 115.1 million U.S. dollars have reportedly been directed to external debt servicing, including 77.4 million U.S. dollars directed at paying the principal debt and 37.7 million U.S. dollars at paying accrued interest.
Tajikistan’s external debt-to-GDP ratio nears ‘red line’
Meanwhile, Tajikistan has neared a troubling psychological threshold by having its external debt reaching 38.2 percent of gross domestic product (GDP), thereby nearing the 40 percent many international economists deem sustainable for developing economies.
The Government of Tajikistan decided to calculate the external and internal debts together denoting it as public debt starting from 2018. Thus, the threshold of value of public debt to GDP was approved at 60%. According to the new strategy, during the attraction of borrowings, priority is given to highly preferential loans containing at least 35% of the grant funds.
As of July 1, the country’s public debt has reportedly amounted to $3.8 billion, or 44.9% of GDP. 87% of the public debt of Tajikistan is external debt, the rest is internal debt (500 million U.S. dollars).
Government bills issued for recapitalization of two troubled banks – Agroinvestbonk and Tojiksodirotbonk – reportedly account for more than 40 percent of the country’s internal debt.
To whom does Tajikistan owe the most?
The Export-Import Bank of China (Eximbank) remains the largest creditor of Tajikistan over the past 12 years – 1.2 billion U.S. dollars.
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 453 million U.S. dollars this year, 459.7 million U.S. dollars in 2022, and 246.8 million U.S. dollars in 2023.
