Tajikistan’s external debt has increased by 18.4 million U.S. dollars over the first nine months of this year, reaching 3,243,700,000 U.S. dollars as of October 1, 2021, according to the Ministry of Finance (MoF).
Government borrowing, which ensures the performance of public services, reportedly accounted for 96.4 percent of the country’s external debt – 3.144 billion U.S. dollars.
Debts of the National Bank of Tajikistan to the International Monetary Fund (IMF), the Islamic Development Bank (IsDB) and China decreased from 15 million U.S. dollars on January 1, 2021 to 8.9 million U.S. dollars on October 1, 2021.
At the same time, other debts with a state guarantee in the structure of external debt increased from 96.3 million U.S. dollars on January 1, 2021 to 111.4 million U.S. dollars on October 1, 2021.
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.
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 459.7 million U.S. dollars in 2022, and 246.8 million U.S. dollars in 2023.
