Turkmenistan, Ashgabat, Dec. 9 / Trend H.Hasanov /
As global demand recovers and hydrocarbon export volumes increase, the Turkmen economy is projected to grow steadily in 2011 and beyond, the International Monetary Fund's (IMF) mission to Turkmenistan reported. "The economic outlook is favorable".
A team from the IMF led by Mrs. Veronica Bacalu visited Ashgabat during December 1−7, 2010. The mission met with the Turkmen authorities to take stock of recent economic developments and ongoing reforms, update the outlook for the next year and over the medium term, and discuss ways to enhance further cooperation between Turkmenistan and the IMF.
The mission welcomes the continued progress in the implementation of the comprehensive reform agenda by the Turkmen authorities aimed at economic diversification and private sector development.
Continued reforms in monetary, foreign exchange, financial, and fiscal areas are contributing to the robust performance of the Turkmen economy. Budget execution continues to be strong and public investment together with foreign direct investment, remain the main drivers of real GDP growth.
"A stable exchange rate, increased access to foreign exchange, and a more liberal trade regime are helping build trust in the national currency and increase the role of banks. The ongoing recapitalization of commercial banks and implementation of international financial reporting standards in the banking system are further strengthening financial sector," Bacalu said.
Growth will also be supported by on-going investment projects to develop the nonhydrocarbon economy, including infrastructure and social programs. In this regard, the mission welcomes the increase in budget spending on education and healthcare envisaged in the recently adopted 2011 budget, as well as measures to strengthen public finance management and enhance business environment for small and medium enterprises.
"Continuation of macroeconomic reforms will be important for further diversification and strengthening of the economy for the benefit of the Turkmen people," the statement reads.
"The IMF stands ready to continue the constructive dialog with the Turkmen authorities and supports their efforts to improve macroeconomic management, reform the financial sector, and expand private sector activity to achieve long-run sustainable growth."
Turkmenistan is one of the key suppliers of natural gas in the Caspian region. The main exporters are China, Russia and Iran.
Turkmen President Gurbangulu Berdimuhammedov said earlier that "the budget expenditures would be increased by 28.3 percent or nearly $ 5 billion this year.
The Turkmen parliament approved a law on the 2011 state budget today, which sets revenues at 61.957 billion manat and expenses at 63.973 billion manat.
Budget revenues will be formed at the expense of the oil and gas, chemicals, power generation and construction sectors. It is expected that 37.1 percent of the total amount of funds allocated to finance public and social services will be spent on education, health care (12.2 percent), culture (4.2 percent), public social provision (36.2 percent), and communal services (10.1 percent).
Berdimuhammedov said that in 2011, $ 741 million would be spent to promote the reforms in the education sector that was as high as 18.5 percent as compared to 2010, in the health care sector - US$ 245 million that was as high as 20.7 percent.
Some $ 84 million would be spent to promote the cultural sphere that was as high as 23.2 percent. In 2011, $ 724 million would be spent for state social welfare that was as high as 35.4 percent as compared to 2010. Large amounts would be allocated to raise pensions, benefits, scholarships in 2011.
The document has been prepared taking into account the growth of such sectors of the economy as agriculture, transportation, communications, textiles and foodstuffs. The revenues will grow at the expense of the private sector next year.