Tajikistan has a developing economy. The economy is heavily dependent on remittance from Tajik labor migrants in Russia, making up nearly half of Tajikistan's GDP. Since independence, it has gradually followed the path of transition economy, reforming its economic policies. With foreign revenue precariously dependent upon exports of cotton and aluminium, the economy is highly vulnerable to external shocks. Tajikistan's economy also incorporates a massive black market, primarily focused on the drug trade with Afghanistan. Heroin trafficking in Tajikistan is estimated to be equivalent to 30-50% of national GDP as of 2012.

In the fiscal year (FY) 2000, international assistance remained an essential source of support for rehabilitation programs that reintegrated former combatants of the Tajikistani Civil War into the civilian economy, thus helping maintain the peace. International assistance also was necessary to address the second year of severe drought that resulted in a continued shortfall of food production. Tajikistan's economy grew substantially after the war. The gross domestic product (GDP) of Tajikistan expanded at an average rate of 9.6% over the period of 2000-2007 according to the World Bank data. This improved Tajikistan's position among other Central Asian countries (namely Turkmenistan and Uzbekistan), which have degraded economically ever since. As of August 2009, an estimated 60% of Tajikistani citizens live below the poverty line.President attempts to give Tajikistan a cultural makeover EurasiaNet The 2008 financial crisis hit Tajikistan hard, both domestically and internationally. Tajikistan has been hit harder than many countries because it already has a high poverty rate and because many of its citizens depend on remittances from expatriate Tajikistanis.

Economic history

This is a chart of trend of gross domestic product of Tajikistan at market prices estimated by the International Monetary Fund with figures in millions of ruling currency. Year Gross Domestic Product US Dollar Exchange 1995 65,000 123.33 Tajik roubles 2000 1,807 1.82 somoni 2005 7,201 3.11 somoni

For purchasing power parity comparisons, the US Dollar is exchanged at SM 0.82 only.

The Tajikistani economy has been gravely weakened by six years of civil conflict and loss of markets for its products. Tajikistan thus depends on international humanitarian assistance for much of its basic subsistence needs. Even if the peace agreement of June 1997 is honoured, the country faces major problems in integrating refugees and former combatants into the economy. The future of Tajikistan's economy and the potential for attracting foreign investment depend upon stability and continued progress in the peace process.

In 2006 GDP per capita of Tajikistan was 85% of 1990s level. While population has increased from 5.3 million in 1991 to 7.3 million in 2009.

Despite resistance from vested interests, the Government of Tajikistan continued to pursue macroeconomic stabilization and structural reform in FY 2000. In December 1999, the government announced that small-enterprise privatization had been successfully completed, and the privatization of medium-sized and large-owned enterprises (SOEs) continued incrementally. The continued privatization of medium-sized and large SOEs, land reform, and banking reform and restructuring remain top priorities. Shortly after the end of FY 2000, the Board of the International Monetary Fund gave its vote of confidence to the government's recent performance by approving the third annual Poverty Reduction and Growth Facility Loan for Tajikistan. Improved fiscal discipline by the Government of Tajikistan has supported the return to positive economic growth. The government budget was nearly in balance in 2001 and the government's 2002 budget targets a fiscal deficit of 0.3% of GDP, including recent increases in social sector spending.

The following table shows the main economic indicators in 1997–2024. Inflation below 5% is in green. Year GDP(in billion US$ PPP) GDP per capita(in US$ PPP)GDP(in billion US$ nominal) GDP growth(real) Inflation(in Percent) Gov. debt(Percentage of GDP)19936.431,1540.68−11.1%2,600.7%n/a19945.179210.83−21.4%350.4%n/a19954.618140.57−12.5%612.5%n/a19964.497841.05−4.4%418.5%n/a19974.657981.121.7%88.0%n/a19984.958341.325.3%43.2%96.6%19995.218511.093.7%27.5%107.8%20005.779280.998.3%32.9%111.4%20016.501,0271.0610.2%38.6%99.4%20027.201,1161.219.1%12.2%98.3%20038.091,2301.5610.2%16.4%69.8%20049.191,3692.0710.6%7.2%49.4%200510.111,4752.316.7%7.3%45.8%200611.151,5932.817.0%10.0%36.8%200712.351,7263.717.8%13.2%34.3%200813.581,8585.147.9%20.4%30.2%200914.201,9004.983.9%6.4%36.9%201015.302,0025.646.5%6.5%36.8%201116.772,1466.527.4%12.4%35.5%201218.372,2977.597.5%5.8%32.5%201320.062,4538.517.4%5.0%29.3%201421.782,6049.246.7%6.1%27.9%201523.302,7267.866.0%5.8%35.0%201625.152,8796.996.9%5.9%42.2%201727.413,0737.547.1%7.3%46.3%201828.573,1377.767.6%3.8%46.6%201932.973,5498.307.4%7.8%43.5%202035.623,7608.134.4%8.6%51.8%202139.734,1148.939.4%9.0%42.1%202245.964,67310.498.0%6.6%32.5%202351.555,14811.868.3%3.7%30.9%202456.375,53313.006.8%4.5%30.7%

Gross domestic product

In 2005 Tajikistan's GDP grew by 6.7%, to about US$1.89 billion, and growth for 2006 was about 8%, marking the fifth consecutive year of annual growth exceeding 6%. The official forecast for GDP growth in 2007 is 7.5%. Per capita GDP in 2005 was US$258, lowest among the 15 countries of the former Soviet Union. In 2005 services contributed 48%, agriculture 23.4%, and industry 28.6% to GDP.Tajikistan country profile . Library of Congress Federal Research Division (January 2007). This article incorporates text from this source, which is in the public domain. The recent global recession has reduced Tajikistan's GDP growth rate to 2.8% in the first half of 2009. Remittances from expatriate Tajikistanis is estimated to account for 30-50% of Tajikistan's GDP.

Sectors

Agriculture

Although the government has announced an expedited land reform program, many Soviet-era state farms still existed in 2006, and the state retains control of production and harvesting on privatized Dehkan farms. Privatization of cotton farms has been especially slow, and unresolved debts of cotton farmers remained a problem in 2006. In the early 2000s, the major crops were cotton (which occupied one-third of arable land in 2004 but decreased after that date), cereals (mainly wheat), potatoes, vegetables (mainly onions and tomatoes), fruits, and rice. Cotton makes an important contribution to both the agricultural sector and the national economy. Cotton accounts for 60 percent of agricultural output, supports 75 percent of the rural population, and uses 45 percent of irrigated arable land. More than 80% of the 8,800 square kilometers of land in use for agriculture depends on irrigation. Tajikistan must import grain from Kazakhstan and Uzbekistan.

Tajikistan produced in 2018:

964 thousand tons of potato; 778 thousand tons of wheat; 680 thousand tons of onion; 641 thousand tons of watermelon; 443 thousand tons of tomato; 356 thousand tons of carrot; 308 thousand tons of vegetable; 300 thousand tons of cotton; 241 thousand tons of grape; 238 thousand tons of apple; 237 thousand tons of maize; 211 thousand tons of cucumber; 116 thousand tons of cabbage; 108 thousand tons of barley; 90 thousand tons of rice;

In addition to smaller productions of other agricultural products, like apricot (31 thousand tons).

Forestry 3% of Tajikistan is forested, mainly at elevations between 1,000 and 3,000 meters. No forest region is classified as commercially usable; most are under state protection. Wood production is negligible, but local inhabitants harvest non-wood forest products.

Fishing Streams and lakes produce a limited amount of fish, and some fish is produced by aquaculture. In 2003 some 158 tons of fish were caught and 167 tons raised on fish farms.

Mining and minerals

Tajikistan has rich deposits of gold, silver, and antimony. The largest silver deposits are in Sughd Province, where Tajikistan's largest gold mining operation is also located. Russia's Norilsk nickel company has explored a large new silver deposit at Bolshoy Kanimansur. Tajikistan also produces strontium, salt, lead, zinc, fluorspar, and mercury. Uranium, an important mineral in the Soviet era, remains in some quantity but is no longer extracted. Fossil fuel deposits are limited to coal, of which about 30,000 tons are mined annually. Tajikistan's extensive aluminium processing industry depends entirely on imported ore.

Industry and manufacturing

The output of most industries declined sharply during the mid-1990s; despite widespread privatization, in the early 2000s industry rallied very slowly. In 2006 an estimated one-third of Tajikistan's 700 major industrial enterprises were completely idle, and the remainder were operating at 20 or 25% of capacity. The causes are outmoded equipment, low investment levels, and lack of markets. To revitalize the sector, in 2006 the government was considering renationalizing some enterprises. Tajikistan's only major heavy industries are aluminium processing and chemical production. The former, which provided 40% of industrial production in 2005, is centered at the Tursunzoda processing plant, the latter in Dushanbe, Qurghonteppa, and Yovon. Aluminium production increased by 6% in 2005. Some small light industrial plants produce textiles and processed foods, using mainly domestic agricultural products. The textile industry processes about 20% of domestically grown cotton. The expansion of light industry output contributed significantly to GDP growth in 2005. The construction industry, about half of which is state-owned, has suffered from low investment in capital projects and from shoddy workmanship that has discouraged international contracts. However, new infrastructure projects and increased housing construction brought a 60% increase in output from 2004 to 2005. As of 2009, one third of industrial plants and factories are inactive, according to Tajikistan's Institute of Economic Studies. Industrial output has fallen by 13% in the first six months of 2009, leading to a fall in export revenues of 48%.

Energy

The rivers of Tajikistan, such as the Vakhsh and the Panj, have great hydropower potential, and the government has focused on attracting investment for projects for internal use and electricity exports. Tajikistan is home to the hydroelectric power station Nurek, the second highest dam in the world. Sangtuda 1 Hydroelectric Power Plant of 670 megawatts (MW) capacity, operated by Russian Inter RAO UES, commenced operations on 18 January 2008 and was officially commissioned on 31 July 2009.

Other projects at the development stage include Sangduta 2 by Iran, Zerafshan by Chinese SinoHydro and Rogun power plant, which, at , is projected to supersede the Nurek Dam as tallest in the world if completed.Richard Foltz, A History of the Tajiks: Iranians of the East, London: Bloomsbury, 2019, p. 161. The Rogun Dam was originally planned to be built by Russia's Inter RAO UES, but following disagreements, Russia pulled out. In 2010, production resumed with Iranian investment and Chinese assistance.

Besides hydropower, other energy resources include sizable coal deposits and smaller reserves of natural gas and petroleum. In December 2010, Russian Gazprom announced discovery of significant natural gas reserves in Sarikamysh gas field with 60 bcm of natural gas, enough for 50 years of Tajikistan's domestic consumption. The national power company is Barqi Tojik.

Tajikistan is a partner country of the EU INOGATE energy programme, which has four key topics: enhancing energy security, convergence of member state energy markets on the basis of EU internal energy market principles, supporting sustainable energy development, and attracting investment for energy projects of common and regional interest.

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