• 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.


  • Confidence and transparency in the banking system need to be increased. Capital and liquidity injections should be conducted in a transparent way and any support to the real sector should be done through the government budget rather than through state-directed lending. Banking supervision should be strengthened further as well. 
  • Further steps are necessary to complete the Agrarian Reform and the implementation of the new Land Code. In particular, land rights will need to become transferable, which would increase access to finance for farmers. 
  • Energy reform needs to continue. This will help to ensure long-term sustainability of the power supply and gradual improvement in operational efficiency in generation, transmission and distribution.


GDP growth has remained stronger than expected at 7.4 per cent in both 2011 and the first half of 2012. The data suggest that this strong economic performance was driven to an important extent by increasing aluminium prices in 2011, continued high remittance growth and the largest-ever cotton harvest. The fiscal deficit was better than expected at around 2.1 per cent of GDP in 2011, while the current account moved from a slight deficit in 2010 to a surplus in 2011 of 0.6 per cent of GDP.

Inflation fell to less than five per cent year-on-year by mid-2012 following the global trend of decreasing commodity prices. However, given the recent development in the world wheat market and internal energy price hikes, inflation could rise again in the second half of 2012.

The situation in the banking sector has continued to deteriorate. State-led lending practices continued during 2011 and 2012 and overdue loans remained relatively high at around 15 per cent of total loans. Capitalisation and liquidity have improved due to significant government and central bank injections of capital and liquidity, but some banks remain undercapitalised and largely dependent on the liquidity loans from the NBT. At the beginning of 2012 the interest rate for government securities issued to compensate for the write-off of directed cotton sector loans was increased. However it remains below the refinancing rate of the NBT and the average inflation rate in the past two years.

Economic growth is expected to slow down in the short term. Eurozone developments and their impact on Russia are bound to affect Tajikistan through lower exports and remittance inflows. Moreover, recent measures to reduce railway traffic through Uzbekistan will also negatively affect trade and economic activity in Tajikistan. 


Progress with agricultural sector reform has been slow. Several initiatives are ongoing but little progress has been made with none brought to completion. The sector employs around 70 per cent of the population and remains heavily controlled by the state. Development of the sector is held back by the limited access to finance, insufficient protection of property rights and the lack of the necessary infrastructure for non-cotton agriculture. The new Land Code was adopted on 19 July 2012 and the working plan on the agrarian reform process has been adopted. 

There have been positive reform developments in the energy sector. The comprehensive restructuring plan of the Barqi Tojik, the integrated national power sector company, was adopted in August 2011. The plan covers the period 2011-18 and envisages operational and financial restructuring of the company, divestment of its non-core assets, unbundling and, potentially, privatisation towards the end of the period. Four working groups have been created to support implementation of the plan. Tajiktransgas’s restructuring has been underway since 2009, with the public unitary enterprise Tajikgas transformed into a joint stock company and its functions divided into transportation and distribution. The privatisation of the company is planned for late 2012. 

The business environment remains weak but important improvements are underway. In the 2012 World Bank Doing Business Report, Tajikistan’s ease of doing business ranking improved slightly from 152th to 147th position. Major improvements were made in the area of starting a business where the country went up by 67 positions. This follows a decision in 2011 to allow entrepreneurs to pay in their capital up to one year after the start of operations, thereby eliminating the requirements related to opening a bank account. Tajikistan has also acceded to the Convention on Recognition and Enforcement of Foreign Arbitral Awards in May 2012. This is a major step forward in improving the investment image. The new tax code draft has been prepared and is a significant improvement over the current version, but the authorities are concerned over potential revenue loss. The revised tax code draft is to be submitted to the parliament in September 2012. 

Banking sector vulnerabilities remain significant. There have been improvements in accounting and provisioning under the Financial Sector Stability Action Plan (FSSAP) but profitability remains low with high non-performing loans ratio. State directed lending practices have further exposed banks to risks related to poor credit quality.

Tajikistan made first steps towards joining the Extractive Industries Transparency Initiative (EITI). The first meeting of the working group for introduction of the EITI in Tajikistan took place in Dushanbe in October 2011. The initiative is aimed at strengthening transparency, good governance and accountability in extractive industries. 



icon-pdfOther Reports

Annual Report 2012
pdf English
pdf French
pdf German
pdf Russian

Financial Report 2012
pdf English
pdf French
pdf German
pdf Russian

pdf Donor Report 2013

pdf Sustainability Report 2012