Page 28 - Small Stans Outlook 2023

The high risk of a debt crisis hitting Tajikistan is associated with the
country's chronic budget deficit and the intensive use of
non-concessional loans. The include $500mn raised through the
placement of eurobonds in 2017 at a rate of 7.12%.

Given Tajikistan's heavy debt burden, Asian Development Bank (ADB)
has been providing the country with free financial support since 2018.

Soaring inflation, a strong dollar and a complete overhaul of global
energy markets are playing hell with Emerging Market debt, with the
world teetering on the edge of a global debt crisis, Oxford Economics
warned in a research paper released in September.

Earlier in the year the IMF warned that the world was facing stagflation,
which last reared its head in the 1970s, causing multiple financial crises
as debt loads became unmanageable.

Most of the countries in debt distress, including Tajikistan, have
relatively low levels of domestic debt. Tajikistan, El Salvador, Ecuador
and Cameroon each have domestic debt under a third of the total. “For
these, when debt reduction is needed, attention will go directly to
haircuts,” said Gabriel Sterne, head of global EM research at Oxford
Economics.

Tajikistan has, meanwhile, met the conditions for a new rapid credit
facility (RCF) framework with the IMF.

28 Small Stans 2023 www.intellinews.com