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EBRD sees strong and medium - term growth in Tajikistan
The EBRD expects Tajikistan to return to higher growth rates in the medium
term fuelled by an increasing amount of foreign direct investment and higher
incomes. In 2005 and 2006 the country has achieved growth rates of 6.9 per
cent (estimate) and 7.0 per cent (projection), according to the Bank’s
Transition Report 2006, which will be presented in Dushanbe on 6 February by
Pauline Grosjean, economist at the EBRD.
The slowdown in the last two years below the average 10 per cent recorded in
the previous five years reflects a fall in cotton production and lower
electricity output. In this context the EBRD warns that Tajikistan is still
highly dependent on a few sectors – aluminium, cotton and power – which are
vulnerable to large fluctuations in prices and demand. Therefore a further
diversification of the economy must remain one of the priorities for the
country.
Foreign direct investment – especially from Russia, China and Iran - has also
been growing encouragingly, but also focused on the key sectors. In addition,
despite improvements the business climate is still perceived as difficult by
foreign investors. The successful consolidation of the banking sector, which
has been achieved, is expected to make doing business in Tajikistan more
attractive.
Although consumption levels have improved for the entire population in recent
years and the number of people living below the poverty line is decreasing,
Tajikistan remains the poorest EBRD country of operations: GDP per capita in
2005 was $1,314. Remittances play an increasing role in poverty alleviation.
Looking at the EBRD region stretching from central Europe to central Asia the
Transition Report finds 5.7 per cent growth for the region as a whole in 2005
(6.7 per cent in 2004). The region continues to be one of the fastest growing
globally, and is projected to expand by 6.2 per cent in 2006.
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