Sound policies benefit Tajikistan's economy, but further reforms needed
Pages | 140 |
Page 140
Civil strife delayed Tajikistan's transition to a market economy, but reforms and relatively favorable conditions more recently have been reducing poverty. In 2004, the economy again grew strongly, and inflation decreased markedly, the IMF said in its annual economic assessment. The IMF Executive Board praised the authorities' sound macroeconomic policies but noted that sustaining rapid growth required stronger commitment to structural reform.
Economic activity continued to diversify rapidly into the services sector. Real household incomes have been on the rise, especially from remittances. Pointing to the critical role workers' remittances have been playing in sustaining growth, the Board encouraged the authorities to take measures to sustain and use more effectively the flow of these remittances. Strengthened fiscal discipline and tighter monetary policy have drastically reduced inflation, and the somoni's exchange rate has remained remarkably stable since 2002. The Board deemed appropriate the current managed float exchange rate regime with intervention limited to smoothing short-term volatility, and it encouraged the authorities to broaden the range of monetary instruments.
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Since 2002, strong growth in tax revenues and continued expenditure restraint have contributed to...
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