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Fitch upgrades Turkmenistan's long-term issuer default rating

Economy Materials 21 August 2024 07:44 (UTC +04:00)
Aman Bakiyev
Aman Bakiyev
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ASHGABAT, Turkmenistan, August 21. Fitch Ratings has upgraded Turkmenistan's long-term foreign currency Issuer Default Rating (IDR) to 'BB-' from 'B+', maintaining a stable outlook, Trend reports.

The agency cited several factors for the rating increase. The upgrade reflects Turkmenistan's strong sovereign balance sheet, supported by the world's fourth-largest gas reserves.

Fitch noted further improvement in Turkmenistan's exceptionally strong balance sheet and expressed confidence that this will be maintained. The country’s external reserves have continued to grow, and it maintains a balanced fiscal position with very low public debt.

However, the rating is limited by weak governance, a challenging business environment, high dependence on commodities, and concentrated export markets.

Despite some improvements, significant data gaps persist in fiscal, macroeconomic, and other official statistics, especially concerning the balance of payments.

The official exchange rate continues to show a substantial differential, and gas production, which represents two-thirds of total exports, fell by 2 percent in the first half of 2024. Inflation is also expected to rise.

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