The size of government in Tajikistan is considerably smaller when the government consumption is compared with the one of developed European countries. That leads to a lower level and quality of services provided to the general public. Such a low level of expenditure provides room for low tax rates, contributing to recent robust economic growth. However, low growth base due to low level of development, disruption of economy during the civil conflict, as well as the drop in economic activities due to economic transition, also had impact on the recorded economic growth. A downside of this situation is a low quality of infrastructure, especially in transportation, due to low public investments. That impedes private sector development. The budget deficits in the wake of financial crisis
accumulated a moderate public debt of 28% of GDP, however the debt is expected to continue to grow, both because of the envisaged slowdown in growth due to economic developments in Russia and due to higher interest rates. The share of shadow economy in the country is very high. Inflation has picked up, partially due to the pass through effect of the national currency devaluation. The role of the state in the economy is still considerable: it is one of the main proprietors of land in the country, which is then leased to private farmers, as well as of the main industrial facilities such as national electric grid operator, natural gas operator and the largest company in the country, the aluminium company Talco. Smaller private enterprises cannot compete with the state-owned enterprises because of the pressure from the ruling elite which is connected to state companies, although there are few official restrictions. Many of the SOEs have reported high financial losses during the previous years, which burden public finances. SOE mismanagement is also connected to corruption, which itself is widespread.