Abstract
This paper focuses on Tajikistan’s Sixth Review Under the Poverty Reduction and Growth Facility (PRGF). The program for 2005 has been implemented satisfactorily. All quantitative and structural performance criteria and indicative targets for end-September 2005 were observed, and all outstanding structural benchmarks for 2005 have either been completed or are in the process of implementation. In view of the authorities’ satisfactory implementation of the program during 2005, the IMF staff is recommending completion of the sixth review under the PRGF.
Since the issuance of the staff report, the following information has become available to staff. This information does not alter the thrust of the staff appraisal.
Growth in 2005 was somewhat lower than projected. Preliminary data indicate that real GDP growth reached 6.7 percent in 2005 (compared to 7.5 percent in the program), owing mostly to electricity supply problems in the last quarter of the year and a weaker than projected cotton harvest.
The inflation outturn for 2005 was in line with the program. Consumer prices rose by 7.1 percent in 2005, compared with the projected program target of 7.0 percent.
The authorities have completed the implementation of all outstanding structural benchmarks under the program. On December 28, President Rahkmonov signed into law the amendments to the Banking Law eliminating major restrictions to foreign capital participation in the financial sector. In addition, staff has confirmed that as of end–2005 the National Bank of Tajikistan had completed the recovery of SM 10 million in loans to the private sector.
Monetary targets were met with a margin. Preliminary data indicate that, in the monetary area, the authorities met all indicative quantitative targets for end-December 2005. Net international reserves exceeded the program floor by $17 million. Moreover, the net domestic assets of the central bank and reserve money were below their indicative ceilings, owing to the strong fiscal performance and as a result of sterilization operations undertaken in late December 2005.
Recent Monetary Indicators
(In millions of somoni; unless otherwise indicated. Using program exchange rates)
Recent Monetary Indicators
(In millions of somoni; unless otherwise indicated. Using program exchange rates)
| End-September | End-December | |||
|---|---|---|---|---|
| Performance criteria | Actual | Indicative targets | Actual | |
| Ceiling on net domestic assets of the NBT | 101 | 41 | 90 | 36 |
| Ceiling on net credit of the banking system to government | -169 | -257 | -178 | -246 |
| Floor on net international reserves (millions of U.S. dollars) | 59 | 78 | 71 | 88 |
| Reserve money (indicative target) | 278 | 277 | 305 | 304 |
Recent Monetary Indicators
(In millions of somoni; unless otherwise indicated. Using program exchange rates)
| End-September | End-December | |||
|---|---|---|---|---|
| Performance criteria | Actual | Indicative targets | Actual | |
| Ceiling on net domestic assets of the NBT | 101 | 41 | 90 | 36 |
| Ceiling on net credit of the banking system to government | -169 | -257 | -178 | -246 |
| Floor on net international reserves (millions of U.S. dollars) | 59 | 78 | 71 | 88 |
| Reserve money (indicative target) | 278 | 277 | 305 | 304 |