Key developments and challenges

Economic growth has remained stronger than expected. Official estimates suggest that gross domestic product (GDP) growth reached 7.4 per cent in 2011 and continued at the same rate during the first half of 2012, driven mainly by services, construction and agriculture. The services sector was boosted by robust growth of remittance inflows, mostly from Russia.

The authorities adopted a comprehensive restructuring plan for Barqi Tojik, the integrated national power sector company. The plan covers the period 2011-18 and envisages operational and financial restructuring of the company, divestment of its non-core assets, as well as unbundling and privatisation during later stages.

Vulnerabilities in the banking sector remain. Banking sector liquidity has improved due to significant government and central bank support, but heavy state interference through directed lending and other non-market practices persists.