Fiscal policy tightened, leaving an overall budget surplus
(including all investment spending) of 0.1% of GDP that reversed
the 2.5% deficit in 2011 (Figure 3.6.3). The state budget surplus, which
excludes foreign-financed investment, rose to 1.8% of GDP from 0.5%
in 2011. Revenue performance was on track, reflecting a 22.6% rise
in tax revenue and a more than 7.3% increase in nontax revenue as
the restructuring of the government’s tax committee and better tax
administration improved collection. Total expenditure rose by 21.9%,
reflecting a 21% increase in spending for social protection. Pensions
increased by 30% and social sector wages by 30%–40%, reflecting
the government’s commitment to improve social services. However,
infrastructure spending fell by 10.1% following the completion
of projects commissioned to celebrate Tajikistan’s 20 years of
independence. Public and publicly guaranteed debt declined to 33.9% of
GDP from 34.3% at the end of 2011.
Lower inflationary pressures allowed the central bank to pursue a
more accommodative monetary policy. The refinancing rate was reduced
repeatedly in 2012, from 9.8% to 8.0% in March, 6.8% in July, and 6.5%
in September. Bank credit expanded by 9.2%, mainly driven by a 14%
increase in short-term credit. However, the share of long-term credit
diminished slightly, by 0.5%, particularly for local currency lending.
Overall, the banking system remains prone to risks from low
profitability and a significant percentage of nonperforming loans, as 9.5%
are 30+ days overdue. The microfinance sector, on the other hand,
continued to expand. In 2012, the average somoni exchange rate remained
stable at TJS4.8 = $1 (Figure 3.6.4), which helped moderate inflationary
expectations through its impact on import prices.
The current account balance worsened, recording a deficit of 3.5% of GDP after the surplus of 2.3% in 2011, as the trade balance deteriorated.
Exports rose by 8.2%, to an estimated $1.4 billion, while high remittances
helped boost imports by 18.6% to $3.8 billion. Export growth reflected
significant gains of 13.5% for cotton fiber and 11.6% for textiles.
In addition, the expanding mining sector has made mineral exports increasingly important, with export earnings doubling in 2012. Electricity exports, though relatively small, grew nearly fourfold in 2012
as the supply of electricity to Afghanistan was sustained through the
winter despite severe domestic electricity shortages, partly to keep the transmission system functional. Purchases of consumer goods were behind the 18.6% rise in imports. However, remittances, mainly from the Russian Federation and Kazakhstan, rose by more than 28% to a record of $3.6 billion, or more than 47% of GDP. Continued government borrowing for investment projects helped
boost capital inflows. Foreign direct investment edged up to an estimated
$50 million in 2012 after hitting a trough in 2010 of less than $10 million.
However, foreign direct investment remains very low at only 0.5% of GDP.
Official reserves rose to $662 million at the end of 2012, equivalent to 2.2 months of imports, from $572 million a year earlier. Public and
publicly guaranteed external debt was 31.2% of GDP, little changed from
the 32.1% a year earlier (Figure 3.6.5).
International Monetary Fund. 2011. Country Report No. 11/130. June; 2012. Country Report No. 12/110. May. http://www.imf.org , National Bank of Tajikistan,
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