DUSHANBE, February 5, Asia-Plus - The European Bank for Reconstruction and Development (EBRD) will present Transition Report 2006 in Dushanbe on February 6.  

A source at the EBRD Dushanbe Office said that the Bank expects Tajikistan to return to higher growth rates in the medium term fuelled by an increasing amount of foreign direct investment and higher incomes.  In 2006, In 2005 and 2006, the country has achieved growth rates of 6.9% and 7% respectively, according to the Transition report 2006.

The slowdowns in the last two years below the average 10 percent recorded in the previous five years reflects a fall in cotton production and lower electricity output.  In this context, the EBRD warns that Tajikistan is still highly dependent on a few sectors -- aluminum, cotton and power – which are vulnerable to large fluctuations in prices and demand.  Therefore a further diversification of the economy must remain one of the priorities for the country.    

Foreign direct investments – especially from Russia, China and Iran – has also been growing encouragingly, but also focused on the key sectors.  In addition, despite improvements the business climate is still perceived as difficult by foreign investors.  The successful consolidation of the banking sector, which has been achieved, is expected to make doing business in Tajikistan more attractive.  

The report, in particular, says that although consumption levels have improved for the entire population in recent years and the number of people living below the poverty line in decreasing, Tajikistan remains one of the low-income countries among the Bank''s countries of operation, with GDP per capita of $1,314 in 2005.    

The report also notes that remittances play an increasing role in poverty alleviation.