TOPIC OF THE WEEK: Tajikistan's high-octane growth bet
Continuing in the vein of my analyses of medium-term frameworks, I follow on the Uzbekistan's 2027-2029 Fiscal Strategy and now dissect the medium-term macroeconomic framework presented by the Tajik government on Jul 29. Without a doubt, it comes across as an ambitious high-growth scenario centered on accelerated industrialization, strong capital formation, low inflation, yet a surprisingly sharp improvement in the external trade position. Moreover, it is much less sophisticated and detailed than the one offered by the Uzbek government.
I would argue that the framework is not obviously unrealistic in any single assumption, but the combination is unusually demanding, with some internal inconsistencies. Sustaining 8.4–8.8% growth rate while inflation stays around 4%, imports barely rise, industrial output surges and nearly one million jobs are created leaves relatively little room for execution disappointments.
The principal risk is that the government's 2027–2029 framework looks more like an aggressive development scenario rather than a conservative macro baseline (such as the one from Uzbekistan I analyzed last week). Even a moderate normalization of remittance inflows or investment activity could therefore produce weaker growth—and less favorable fiscal arithmetic—than envisaged in the official framework. For investors then, the key issue is execution risk rather than direction of travel.
Now read on...
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