IMF国际货币组织全球-Republic-of-Tajikistan_Request-for-Disbursement-under-the-Rapid-Credit-Facility_58页_1mb

Summary of IMF Disbursement Request under the Rapid Credit Facility for the Republic of Tajikistan

Core Content

The Republic of Tajikistan requested a disbursement under the Rapid Credit Facility (RCF) to address the urgent balance of payments and fiscal needs caused by the COVID-19 pandemic. The IMF Executive Board approved a disbursement of US$189.5 million (equivalent to SDR 139.2 million, or 80% of quota) to support the country's response to the crisis and ensure macroeconomic stability.

Key Information

• Context:

  • In 2019, Tajikistan's economy showed favorable growth at 7.5%, but macroeconomic outlook was challenged by large fiscal and external imbalances.
  • The banking sector was recovering from the 2015-16 shocks, though non-performing loans (NPLs) remained high at ~25%.
  • The National Bank of Tajikistan (NBT) stabilized the somoni against the USD, with reserves at ~6 months of imports.

• Impact of the Shock:

  • The pandemic significantly worsened the macroeconomic outlook, with real GDP projected to contract by 2% in 2020.
  • Remittances dropped by ~50% in March and first half of April, and government revenues declined.
  • The current account deficit widened to 7.8% of GDP in 2020 due to lower remittances and non-gold exports.
  • Balance of payments needs are estimated at USD 384 million for 2020, with a fiscal gap of USD 373 million.

• IMF Support:

  • The RCF disbursement is justified due to the urgency of the balance of payments need and the lack of time to design a program with upper tranche conditionality (UCT).
  • The disbursement will help meet external and fiscal financing needs, catalyze donor support, and preserve fiscal space for essential health and social spending.

• Fiscal Policy:

  • The fiscal deficit is expected to rise to 7.7% of GDP in 2020, primarily due to increased health and social spending and reduced revenues.
  • The authorities have reallocated lower-priority spending to provide fiscal room, with a 0.5% of GDP reduction in current expenditure.
  • Capital expenditure will be cut by 1% of GDP in 2020, including non-Roghun projects.
  • Fiscal consolidation of 2% of GDP is planned for 2021-22 to stabilize debt and meet fiscal targets.
  • Deficit targets for 2021 and 2022 are set at 4.4% and 2.6% of GDP, respectively.

• Monetary and Exchange Rate Policy:

  • The NBT is focused on controlling inflation and liquidity pressures.
  • Inflation exceeded the target range due to supply shocks, reaching above 9% in March 2020.
  • The NBT raised the policy rate by 50 basis points to 12.75% to contain inflationary pressures.
  • The exchange rate is allowed to depreciate by 5%, and greater flexibility is planned to support external adjustment and growth.

• Debt Sustainability:

  • Public debt is expected to rise to 52.8% of GDP in 2020, but is considered sustainable in the medium term due to fiscal consolidation and concessional financing.
  • Debt distress risk remains high, with two indicators breaching thresholds.
  • Debt sustainability analysis (DSA) is included, highlighting the need for prudent borrowing and fiscal space management.

• Transparency and Governance:

  • The authorities committed to transparency, including quarterly spending reports and ex-post audits of crisis-related spending.
  • Procurement processes will be subject to audits, and results will be published on the Ministry of Finance's website.

• Medium-Term Outlook:

  • The immediate impact of the pandemic is expected to dissipate by the end of 2020, with strong recovery projected in 2021.
  • Exchange rate flexibility and fiscal consolidation are key to ensuring macroeconomic stability and price competitiveness.
  • The RCF disbursement is seen as a bridge to a potential UCT program if the shock's impact is more severe or prolonged.

Main Views

• The pandemic has caused a severe economic shock, particularly in 2020Q2-Q3, with significant impacts on trade, remittances, and government revenues.
• Fiscal consolidation is necessary to ensure debt sustainability, with a focus on reducing non-priority spending and improving tax collection.
• Exchange rate flexibility is important to support external adjustment and monetary stability, while avoiding excessive volatility.
• The IMF's support is critical to prevent severe economic disruption and maintain reserves above 4.5 months of imports.
• Donor support is essential to close the financing gap, and transparency in the use of funds is a priority for the authorities.

Key Documents

• Press Release: Announced the approval of the US$189.5 million RCF disbursement.
• Staff Report: Provided an analysis of economic developments, shock impact, and policy discussions.
• Debt Sustainability Analysis (DSA): Assessed the sustainability of Tajikistan's public debt.
• Letter of Intent (LOI): Included in the Staff Report, outlining the fiscal consolidation plan.
• Staff Statement: Updated information on recent developments and policy responses.
• Statement by the Executive Director: Highlighted the IMF's role and policy commitments.

Additional Notes

• The IMF's transparency policy allows for the deletion of market-sensitive information and avoidance of premature disclosure of policy intentions.
• The RCF disbursement is part of a broader strategy to catalyze donor support and preserve fiscal space.
• Exchange rate management and monetary policy vigilance are crucial to mitigate second-round effects and support economic recovery.