Economists from the Eurasian Development Bank believe that the stability of the national currency in Tajikistan is having a restraining effect on price growth. The local currency has remained stable at 10.95-10.96 somoni per $1 since March 2003.
According to the EDB publication, the annual inflation rate in the country slowed down to 3.6% y/y in February 2024 from 3.8% y/y in January. The National Bank of Tajikistan reported that the inflation rate in February decreased to 0.3% from 0.4% in the previous month.
The increase in prices in February this year is primarily attributed to the rise in food prices by 0.5%. The cost of paid services to the population increased by 0.2%, while non-food products became 0.1% more expensive.
Analysts from the regulator believe that seasonal factors and increased demand for essential goods and products have influenced the price levels. In the past two years, Tajikistan has recorded low inflation rates of 4.2% and 3.8%, respectively. The lowest inflation rate in the 32 years of the republic's independence was recorded in 2013 at 3.7%.
The National Bank previously explained the reasons for low inflation in the last two years as the impact of "seasonal factors, a rich harvest of certain agricultural products, and stabilization of import prices". The target inflation rate set by the National Bank of Tajikistan for the past years, including the current year, is within 6.0% (±2 percentage points), meaning between 4.0% and 8.0%.
Central banks of countries with market economies prefer to maintain inflation at 5-6% per year (low or creeping inflation). Economists consider this level ideal for the country's further development, as very low inflation, let alone deflation (price decrease), is more dangerous than high price growth.
