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publication September 13, 2021

Tajikistan Economic Update – Summer 2021

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The Tajikistan Economic Update is a semi-annual report that analyzes recent economic developments, prospects, and policy issues in Tajikistan.

Download the full report — Tajikistan Economic Update, Summer 2021: Rebounding Economy, Challenges Remain


  • After the economic slowdown in 2020, Tajikistan’s GDP grew at an annual rate of 8.7 percent in the first half of 2021.
  • Tajikistan’s strong economic rebound was supported by an increase in precious metals exports and gains in both private investment and consumption.
  • The county’s economic outlook hinges on the availability of vaccines, the pace of vaccination, and the resilience of the global economy in the face of new waves of the pandemic.

Recent Economic Developments, Inflation, FDI

Tajikistan’s economy has been experiencing a fast recovery from the COVID-19 pandemic. According to official estimates, real GDP grew by 8.7 percent year over year in the first half of 2021 after growth slowed to 4.5 percent in 2020. Tajikistan achieved higher economic growth through an increase in the export of precious metals and considerable pickup in domestic demand. In addition, the gradual opening of air traffic with Russia stimulated the inflow of migrant remittances and supported the recovery of household consumption.

According to the Listening to Tajikistan survey, the social and economic well-being of the population severely deteriorated following the outbreak of COVID-19, but concerns about the economic impact of the crisis have subsided steadily over the course of 2021. The share of people who reported being “very” concerned about the impact of COVID-19 on the economy and their livelihoods fell from more than 75 percent in May 2020 to less than 36 percent in January 2021. A large majority of people surveyed changed their answer to being “somewhat” concerned.

Following expansionary fiscal policy in 2020, the has government pursued budgetary consolidation during 2021 in line with the adopted budget law for 2021. The expiration of COVID-19-related fiscal relief and solid economic activity in the first half of 2021 bolstered revenues. Almost all sectors saw an increase in budgetary funding, led by social outlays and infrastructure projects in energy and transport. Inflation moderated from its peak in March 2021, but rising global demand for fuel, food, and supply chain bottlenecks are expected to continue exerting upward pressure on import prices.

Foreign investment collapsed by 47 percent year-over-year to $192.7 million in 2020, but showed a strong recovery in the first half of 2021, increasing by 43.7 percent to about $118 million.  China accounts for three quarters of all foreign investments in Tajikistan. Investments originating from Russia declined to about 7 percent of the total and were the second largest source of FDI.

Economic Outlook and Risks

Tajikistan’s GDP growth is projected at 6 percent in 2021 and to moderate in the medium term. Improvements in the global economy will foster international trade and create opportunities for people to travel and work abroad. Remittances and foreign investment are projected to rise, reflecting a better growth outlook in Russia and China. The economic recovery considerably depends on the availability and efficiency of vaccines and the resilience of the global economy in the face of new waves of the pandemic. Potential outbreaks of COVID-19 and delays in vaccination may trigger new lockdown measures and subdue economic activity in Tajikistan.

The economy remains highly vulnerable to changes in remittances that support the population’s consumption and finance huge import bills. Limited domestic production and high dependence on imports make the country vulnerable to external price fluctuation, especially of fuel and food products.

Escalation of geopolitical tensions in Afghanistan and the border dispute with the Kyrgyz Republic pose a security risk. Growth prospects are also affected by climate change affecting the country, including natural disasters and temperature anomalies. Pre-COVID structural challenges, including inefficient SOEs and insufficient development of the private sector remain relevant for the economy and continue to weigh on Tajikistan’s future development.

Special Focus – Economic and Social Impacts of COVID-19

Vaccination against COVID-19 is considered the most effective way to end the pandemic. On February 9, 2021, the government finalized its National Deployment and Vaccination Plan (NDVP), which outlines Tajikistan’s initial approach to vaccinating 70 percent of the population. The NDVP identifies health workers, older people, persons with chronic conditions and comorbidities, pregnant women, and essential government workers as key priority groups for the first stage of vaccination. These groups jointly account for 20 percent of the population.

Tajikistan is one of 92 countries eligible to receive donor-financed vaccines under the Gavi COVAX Advanced Market Commitment (AMC) mechanism. COVAX has committed to fully subsidizing vaccines for 20 percent of the population prioritized in the NDVP. Following a successful fundraising event on June 2, Gavi increased its projections of population coverage, announcing that it had enough resources to procure vaccines for up to 30 percent of the population of AMC countries at no cost to them. In addition, the mechanism will provide extra doses at subsidized prices. In sum, through donor financing, it is expected that COVAX will supply vaccines for about 50 percent of the population of Tajikistan. In February 2021, the World Bank approved a $8.63 million grant for procuring vaccines for the priority population groups.

Learn More – Download the full report.