Investments Up 18.4%: Tajikistan's Boom Continues Without Foreign Capital
Central Asia Column “Steppe Ahead”
Tajikistan’s fixed asset investments grew by 18.4% in the first half of 2026. Private investors increased their spending by 1.5 times, while foreign investment plummeted by 31.4%. This is according to the latest economic report from the Eurasian Development Bank (EDB), as reported by the Azerbaijani news agency Trend on September 19. The country’s investment boom is thus proceeding almost entirely without foreign capital.
Private Capital Drives Growth; the Government Keeps Pace
According to the EDB, the private sector was the main driver of investment activity in the first half of the year. Capital expenditures by private companies increased 1.5-fold year-over-year. The majority of the funds went toward residential construction. Government investment grew by 7.9%. “Tajikistan’s economy is maintaining high growth rates, supported by robust domestic and foreign demand,” EDB analysts write, according to Trend. The bank cites investment activity as a key driver of Tajikistan’s growth, across all sources of financing. This makes the outlier all the more significant: foreign capital shrank by nearly a third. This is a problem for Central Asia’s smallest economy, as the country’s major infrastructure projects exceed the capacity of the domestic capital market. The large-scale Rogun hydropower project alone, with a planned capacity of 3.6 gigawatts, costs $6.3 billion according to official figures. The project is also crucial for the industry’s power supply: to this day, the country still ration electricity in the winter. According to the Kazakh news portal Qazinform, Energy Minister Daler Dzhuma has indicated that seasonal blackouts will end in 2027, when the third Rogun unit comes online.
8.2% Growth: Exports Rise by 65.4%
This investment surge is taking place against the backdrop of an economy that is currently outpacing nearly all of its neighbors. Gross domestic product grew by 8.2% year-over-year in the first half of the year, while exports rose by 65.4%. Trend reported these figures from the Tajik Statistical Agency in mid-September. The industrial sector is contributing to this growth: Production of metals and metal products reached 7.29 billion somoni in the first seven months, equivalent to approximately 790 million U.S. dollars. This represented an 8.8% increase year-over-year. The textile industry grew by 2.8% during the same period. The EDB now expects 8.3% growth for the full year. Only Kyrgyzstan is expected to grow faster in the region, according to the Tajik news portal Asia-Plus. In December, the bank had still projected 8.1% growth for Tajikistan, behind Kyrgyzstan at 9.3% and ahead of Uzbekistan at 6.8%. At the time, it cited new capacity in the energy and industrial sectors, as well as high world market prices for gold and non-ferrous metals, as drivers of growth. By contrast, the entire EBRD region is projected to grow by only 2.3% in 2026. Central Asia thus remains the region’s growth hub. It is precisely these prices that are now driving the surge in exports. According to Asia-Plus, Dilshod Jurazoda, Director General of the state-run investment agency Tajinvest, has recently been aggressively courting capital: “Energy, digital infrastructure, logistics, tourism, mining, and industrial production are among Tajikistan’s most promising investment sectors.”
Foreign Capital Is Lacking: Dushanbe Seeks New Investors
The 31.4% slump in foreign investment is the boom’s Achilles’ heel. Trend views this as a warning sign: The country remains dependent on external capital inflows to maintain the pace of investment. Dushanbe is already taking steps to counter this. On September 14, Finance Minister Faisiddin Kahhorzoda and EBRD President Odile Renaud-Basso signed an investment roadmap for the years 2026 through 2030 in London, as reported by Asia-Plus. According to the agreement, the European Bank for Reconstruction and Development plans to finance power grids, renewable energy, roads, and rural broadband. In return, it is demanding reforms in state-owned enterprises and electricity rates. Two days later, according to Asia-Plus, Dushanbe signed 15 cooperation agreements with South Korea, including agreements on transportation and energy. The macroeconomic environment remains predictable for investors: The EBRD expects inflation of 4.5% by year-end and a stable somoni at around 9.8 per U.S. dollar. That same week, Kahhorzoda courted investors at J.P. Morgan’s Emerging Markets Conference in London. In the long term, however, Trend anticipates a slowdown in growth to about 6.7% by 2030. Cumulatively, that would still amount to about 43% growth from 2025 to 2030. The key question, therefore, is whether the privately driven construction boom will hold up if gold prices fall and foreign capital continues to stay away. The second half of the year should provide the answer.
Source: Trend, Trend, Trend, Asia-Plus, Asia-Plus, Asia-Plus, EDB, Qazinform (all EN)