Can Tajikistan settle its debts of half a billion dollars?

According to the schedule, next year Tajikistan must repay 473 million dollars in external debts.

The Ministry of Finance of Tajikistan confirmed that the repayment of loans from China’s Exim Bank will be due in 2025. Previously, the country allocated more than 200 million dollars annually for the repayment of external debt and interest payments. However, next year Tajikistan must return 473 million dollars.

With the doubling of the repayment amount, the question arises as to where the country will find that much money?

First Deputy Minister of Finance Yusuf Madjidi assured journalists that “the budget has such an opportunity.” However, he did not explain how and where the money will come from.

According to him, in 2022-2023, Tajikistan allocated 10% of the country’s budget for servicing external debt. In 2025, the same amount will be allocated for the repayment of external debt.

According to forecasts from the Ministry of Finance, next year the state budget of Tajikistan will exceed 50 billion somoni (4.7 billion dollars), of which about 5 billion somoni (473 million dollars) will be directed to servicing external debt.

At the same time, the Ministry of Finance has been tasked with finding concessional loans from development partners to repay Eurobonds.

Experts believe that the heavy burden of external debt will fall entirely on taxpayers, which may again lead to an increase in taxation.

Currently, Tajikistan’s external debt amounts to 3.2 billion dollars. The state budget is 4.7 billion dollars.

The largest creditor of Tajikistan is China, with an amount exceeding 900 million. There are also multi-million dollar debts to international financial institutions such as the World Bank, the Asian Development Bank, the Islamic Development Bank, and the European Bank for Reconstruction and Development.