Tajikistan sees GDP growth at 7-8 percent 2012-14

DUSHANBE: Tajikistan's economy will grow about 7-8 percent a year in gross domestic product terms in 2012-2014, while inflation will likely be around 10.5 percent in 2012, the country's finance minister told parliament on Wednesday.

Members of Tajikistan's lower house approved the 2012 budget on Wednesday, including a forecast for GDP growth of 8 percent in 2012, up from an expected 6.5 percent in 2011.

Inflation is forecast to slow down to 10.5 percent by the end of 2012 from 13 percent in 2011.

The landlocked central Asian nation bordering China and Afghanistan is the poorest of the 15 former Soviet states. Its GDP growth fell to 3.9 percent in 2009 during the economic crisis.

Almost half of the 7.5 million population lives on less than $2 a day, according to World Bank data.

"The federal budget for 2012 is oriented on social-economic policy and enables various strategies and government programmes for the development of Tajikistan, in particular lowering poverty in the republic," Finance Minister Safarali Nazhmudinov said.

The government's growth estimates are more optimistic than those of the International Monetary Fund, which in October forecast GDP growth for Tajikistan of 6 percent in 2011 and 2012.

The Fund also urged the government to tackle double-digit inflation, which has been pushed up by rising food and fuel costs.

The 2012 budget is worth 35.8 billion somoni ($7.53 billion), up from 30 billion somoni this year. The government anticipates cutting the budget deficit to 0.5 percent from 1 percent.

Spending on health and education will rise by more than 20 percent to 1.4 billion somoni and 726 million, respectively.

The budget must now be approved by the upper house of the parliament and long-term President Imomali Rakhmon, two steps expected to be formalities.

Copyright Reuters, 2011