Republic of Tajikistan: Third Review under the Policy Coordination Instrument-Press Release; and Staff Report

This paper presents Tajikistan’s Third Review under the Policy Coordination Instrument (PCI). The PCI aims to anchor macroeconomic policies and support structural reform implementation to maintain macrofinancial stability and foster more sustainable and inclusive growth. Program implementation has remained on-track, with all but one of the quantitative targets for the Third Review met. Tajikistan’s economy has continued to perform favorably. Improved revenue mobilization and spending efficiency are key to increasing fiscal space for priority social and development projects. Further efforts are needed to strengthen collections from several state-owned electricity consumers and bring electricity tariffs to cost recovery. Broad-based structural reforms, including further efforts to strengthen governance, are key to sustaining high growth rates over the medium-term. Transparent governance and policy frameworks are key to improving the business environment and creating space for private sector-led investment to support domestic job creation and unlock the economy’s long-term potential.