DUSHANBE (ADB press service) – The Asian Development Bank (ADB) has revised its 2012 growth forecast for Tajikistan upward, largely because remittances have been higher than expected.

In an update of its flagship annual economic publication, Asian Development Outlook 2012 (ADO 2012), released today, ADB raised Tajikistan’s gross domestic product (GDP) forecast for the year to 6.5%, from 5.5% projected in April. The 2013 GDP growth forecast is maintained at 6.0%.

“Higher remittances mean that services continued to be the main driver of growth, expanding by 19.6% in the first half of 2012,” said Asel Chyngysheva, Officer-in-Charge of ADB’s Tajikistan Resident Mission. “Industry grew by 12.1%, reflecting an increase of more than 18.0% in mining and a 12.7% expansion in processing industry. Agriculture grew by 10.1%.”

Average inflation continued to abate from 12.5% in 2011 to 4.6% in the first half of 2012, mainly reflecting lower food prices. The exchange rate remained stable over the same period, but duties and a market monopoly have kept prices for imported oil products high. ADO Update forecasts that inflation will reach 7.5% in 2012, and 8.5% in 2013.

The report further says that exports shrank by 2.5% year on year in the first six months of 2012, mainly due to decreased exports of aluminium and cotton. Imports rose by 15.1% over the same period, powered by remittances. The anticipation of lower import prices for fuel and increasing remittance inflows prompted the ADO Update to forecast the 2012 current account deficit at 3.5% of GDP, and 5.0% for 2013.

Asian Development Outlook and Asian Development Outlook Update are ADB’s flagship economic reports analyzing the economic conditions and prospects in Asia and the Pacific, and are usually issued in April and September-October, respectively.

Tajikistan joined ADB in 1998, and to date the institution has cumulatively approved a total assistance of more than $966 million in concessional loans, grants and technical assistance to the country. ADB’s operations benefit the population by reducing isolation, increasing communication, broadening access to electricity, improving social services, and creating more income-generating opportunities.