Tajikistan’s economic growth will slow to 5 percent this year from 8 percent last year, according to the World Bank, due to “shrinking remittances and an expected reduction in private consumption”.
“Tajikistan’s economy is set to grow by 8% in 2022 thanks to strong remittance inflows, which account for more than one-third of GDP, mainly from Russia,” the World Bank said in its latest report, “Sluggish Growth, High Inflation, and the Cost of Living Crisis.”
The report authors estimate that Tajikistan’s economic outlook faces significant downside risks.
“Persons with dual Tajik-Russian citizenship remain at high risk of Russian military mobilization, which could trigger return migration and a greater need for social assistance,” the report said.
The report emphasizes that the growth model of Tajikistan’s economy is based on the extraction and export of natural resources, as well as the large remittances of migrants from Russia.
According to World Bank experts, this model is inherently vulnerable because it is highly dependent on labor immigration income, has a limited domestic production base, and does not diversify its export products.
They attribute last year’s high economic growth to Russia’s high demand for labor, “combined with the strengthening of the Russian ruble, which led to a large inflow of remittances, which stimulated household consumption”.
The number of migrants rose sharply last year but fell after Russia announced a mobilization in September, the report said. “The proportion of immigrant households increased from 42% to 50% in the first half of 2022, but has declined steadily since then,” concluded the World Bank analysts.
At the same time, the latest report of the Asian Development Bank pointed out that more than 50% of families in Tajikistan mainly rely on remittances to live. Eighty percent of the remittances came from Russia, where nearly 1 million Tajikistanians work.
According to the bank’s data, more than 200,000 Tajik citizens in Russia also have Russian citizenship.
Notably, Tajik authorities refuse to provide remittance data to the media, although there are no legal restrictions on this.
Tajikistan media previously obtained this information from the website of the Central Bank of Russia. But Russian regulators stopped releasing such data after the conflict between Russia and Ukraine began. The reasons and timing of the pause in publishing the data were unclear.
In 2021, the total amount of personal remittances from Russia to Tajikistan will reach 1.8 billion US dollars, a year-on-year increase of 3.4%. Of this, 94.3% were in rubles, 5.6% were in US dollars and 0.1% were in euros.
Source: Sina Finance
