DUSHANBE, Tajikistan, September 27. Moody's Ratings has confirmed the Government of Tajikistan's issuer and senior unsecured ratings at B3 and upgraded its outlook from stable to positive, Trend reports.
This positive outlook comes as the government improves its dialogue with international partners, coinciding with a recovery in the economy and finances. This improvement increases the chances of securing additional funding to tackle ongoing fiscal challenges.
Specifically, more concessional funding from development partners could help meet financial needs for the Rogun Hydro Power Plant project (HPP). This support would lower risks associated with the project and reduce fiscal pressure on the government.
The outlook also suggests that the government can maintain fiscal discipline and make necessary reforms while managing large projects like Rogun HPP. These efforts will help ensure continued access to external financing and gradually improve institutional capacity. Tajikistan's foreign-exchange reserves will also mitigate repayment risks on its $500 million Eurobonds due between 2025 and 2027.
Despite these positive signs, Tajikistan's credit rating reflects challenges from its small, narrowly diversified, and low-income economy, as well as weak governance. However, there are signs of improvement in policy effectiveness.
According to Moody, the country also faces significant liquidity and external vulnerability risks, although its medium-term growth outlook remains strong, largely due to hydropower generation and a high level of concessional borrowing, which keeps debt servicing costs low.
Tajikistan's local and foreign currency ceilings are maintained at B2 and B3, respectively. The one-notch difference between these ratings stems from the government's substantial role in the economy, weak institutions, and the country's vulnerability to external risks, although this has lessened in recent years.
Additionally, the gap between the foreign and local currency ceilings reflects limited capital account convertibility and moderate external debt, leading to risks related to currency transfers.
