DUSHANBE, April 15, 2011, Asia-Plus -- Tajikistan’s economic recovery is expected to accelerate on strong remittance inflows and increases in aluminum and cotton prices, the Asian Development Bank (ADB) says in a major new report.

ADB''s flagship annual economic publication, Asian Development Outlook 2011 (ADO 2011), released recently, said growth is projected to edge up to 6.8% in 2011 and 7% in 2012. Remittances are forecast to grow by about 7% each year in 2011 and 2012, reaching their pre-crisis high in 2012.

“These will underpin rising private consumption expenditure, boosting imports and so buoying budget revenue,” said Joji Tokeshi, ADB''s Country Director for Tajikistan.

However, Tajikistan’s heavy reliance on remittances, dependence on a few export commodities and very narrow production base are viewed as key development challenges hindering more broad-based and sustainable growth.

Qahhor Aminov, Economics Officer of the ADB''s office in Tajikistan, said that the government needs to strengthen infrastructure and services, improve the business and investment climate, and diversify agricultural output.

Tajikistan’s economy grew 6.5% in 2010 from 3.4% in 2009. Industry expanded by about 10%, due to the growth in light manufacturing and food processing sectors. Public spending on key infrastructure projects, such as roads, tunnels, and transmission lines, also underpinned the growth in construction sector.

ADO 2011 further projects that inflation in Tajikistan will reach 10.5% and 9.5% in 2011 and 2012, respectively, reflecting rising global food and fuel prices.

ADO 2011 includes comprehensive economic analysis of more than 40 economies in developing Asia and the Pacific, and examines aggregate trends and medium-term prospects by subregion— East Asia, Southeast Asia, South Asia, Central and West Asia, and the Pacific —in the context of global economic movements.

Tajikistan joined ADB in 1998, and to date the institution has approved a total assistance of over $800 million in concessional loans, grants and technical assistance to the country.