Tajikistan’s authorities report yearly on economic growth, an increase in gross domestic product (GDP) and higher incomes for the population. However, people say they do not feel the improvements in living conditions, and the nominal increase in wages is being eroded by inflation, says an article published by CABAR.asia published on June 14.
Tajikistan’s GDP has reportedly grown more than 13-fold over the past 22 years, from US$0.86 million in 2000 to US$11.3 billion in 2022.
CABAR.asia notes that while in 2022 GDP reached 115 billion somonis (over US$11.3 billion), in 2023 it is projected to reach 127.3 billion somonis (over US$12.4 billion). Thus, the growth is reportedly more than 10.6%. The increase in wages is even more spectacular. While in 2000, according to official data, the average wage was about 16 somonis (about US$7.00), in February 2023 it was more than 1,874 somonis (about US$172).
In other words, during this period there was a nominal increase of wages by more than 100 times in somoni and 24 times in US dollar terms, but at the same time, the purchasing power of both the national currency and the US dollar decreased significantly. Moreover, the exchange rate of the somoni has fallen steadily against the dollar over the past few years. While in 2001 one US dollar was equal to 2.20 somonis, in June 2023 it was 10.92 somonis.
Residents of Tajikistan earn the lowest wages in Central Asia.
The average monthly wage in Kazakhstan in 2023 was 340,000 tenge (about US$760). The average salary in Turkmenistan, according to official data, is US$715; in Kyrgyzstan, it is about 30,000 soms (US$341); and in Uzbekistan, 3.72 million soms (US$335) by the end of 2022.
According to experts, annual GDP growth does not have a tangible impact on the level of income of Tajik citizens. They are growing due to other factors, above all remittances of labor migrants.
Tajik officials claim that external and seasonal factors cause high prices. Tajik Minister of Economic Development and Trade Zavqi Zavqizoda said at a recent press conference that food and fuel prices are rising all over the world.
According to him, in 2022, ‘regardless of the influence of external factors that have led to unprecedented increases in food and fuel prices around the world’, Tajikistan has managed to keep inflation stable at 4.2%. The minister specified that that was due to a slight increase in food prices by 5.2%, in non-food goods by 4.0% and services by 1.9%.
Meanwhile, according to the World Bank and the International Monetary Fund, inflation in Tajikistan in 2022 reached 8.3%.
Zavqizoda called 2022 a difficult year for the global economy and, according to him, ‘even in developed countries the inflation rate over the past 40 years was the highest ever.’
Zavqizoda attributed the rise in prices of some products to seasonal factors.
Meanwhile, an economic expert Nour Safarov said in an interview with CABAR.asia that living standards depend on various factors that go beyond GDP.
‘The first and main factor is that all people are different and all have different skills and abilities, mental, and physical, as well as certain moral and social values. Annual GDP growth of 7-8% does not mean that everyone will benefit from this growth,’ he said.
Most of Tajikistan’s income is reportedly distributed to the 1-5% of citizens who have access to political power, financial resources and key decision-making.
The remaining 95%, in his opinion, have to live off their backyards and small farms, running small businesses, retail trade and a very large flow of labor migration.
Source: Asia Plus