Tajikistan needs swift reforms to preserve economic growth, says World Bank

The World Bank has announced that Tajikistan's medium-term outlook remains favourable, with growth projected to moderate to 7% in 2025 and converge toward a growth rate of 4.5% in 2026 and 5% in 2027.

Economic outlook faces several downside risks that stem from Russia’s labor migration policies, global policy instability, and ongoing regional conflicts. 

The World Bank’s annual Tajikistan Economic Update, released today, emphasized that sustaining Tajikistan’s strong economic momentum and unlocking its growth potential will require the government’s firm commitment to accelerating reforms. Key priorities include attracting greater private investment by strengthening the competition framework, streamlining investment procedures, enhancing investor protection, and improving public sector efficiency and accountability to ensure better public service delivery.

Tajikistan’s real gross domestic product (GDP) growth reached 8.4% in 2024 and 8.2% in the first quarter of 2025 with services and industry driving the expansion. Domestic demand was bolstered by substantial remittance inflows, which totaled approximately 49% of GDP in 2024 compared to 39% in 2023, and by increased public sector wages.

The World Bank draws the attention to the importance of digital transformation in Tajikistan’s trade sector, pointing to significant infrastructure and regulatory gaps, which could bring substantial benefits. The report notes that poor internet connectivity affects nearly half of the country’s customs checkpoints. Additionally, there are shortcomings in areas such as digital identity, paperless trade, data protection, security standards, cross-border data transfers, and consumer safeguards.

“Tajikistan stands at a crucial juncture in its economic development, where smart digital transformation can positively shape its trade prospects for years to come,” said Bakhrom Ziyaev, the World Bank Senior Economist for Tajikistan and author of the report. “By prioritizing these reforms, Tajikistan has the potential to significantly facilitate trade and digitalization of the economy thus unlocking substantial economic growth, generating new high-value employment opportunities, and enhancing its integration into the regional and global digital economy.”

The World Bank's report identifies several priority areas for accelerating digitalization in Tajikistan, including strengthening digital connectivity and cybersecurity, modernizing government digital services to improve online service efficiency, creating an integrated ecosystem for seamless trade and implementing performance monitoring.

The Bank projected that e-commerce market in the country is expected to grow at a modest 4.7% annual rate from 2025 to 2029, reaching $28.4million by 2029. Referring to an international experience, strong digital trade regulations can reduce goods trade costs by up to 20% and service costs by up to 30%. 

However, Tajikistan needs to accelerate the improvement of its legal and regulatory frameworks, which currently have significant gaps hindering the development of digital commerce. It also emphasizes the importance of strengthening the legal framework to align with international standards for electronic transactions and data protection.

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