Turkmenistan’s economy remained resilient to regional market turbulence, says IMF
Ashgabat, Turkmenistan, Apr. 4
By Huseyn Hasanov - Trend:
Over the last year, Turkmenistan's economy remained resilient to regional market turbulence, supported by strong hydrocarbon exports and public investment, the International Monetary Fund (IMF) said in a message Apr. 4.
"Real GDP growth reached 10.3 percent, and CPI inflation was contained to an average 6 percent in 2014 in spite of tariff hikes for utilities and transportation," said IMF.
IMF said the authorities in Turkmenistan have taken pro-active measures to increase resilience in a difficult external environment.
"After having maintained a parity of 2.85 manat to the dollar since May 2008, the authorities devalued by 22 percent in January with a view to lessen the pressures from depreciating currencies in the region on domestic firms," according to the message.
"Initiatives to help contain inflation, including privatization of small-scale agriculture, and support for export and import-substituting firms, have complemented the devaluation.
IMF said that in 2015, real GDP growth is projected to decelerate to 9 percent on the back of declining natural gas export revenues and lower public investment as a share of GDP.
"In spite of the recent devaluation, inflation is expected at 6 to 6.5 percent on an end-of-year basis (7 to 8 percent on average) owing to a projected further fall in global food prices as well as US dollar - and hence manat - appreciation," according to IMF.
IMF said the key external risks to this relatively benign outlook include permanently lower oil and natural gas prices; lower-than-expected natural gas export volumes to China or Russia; and further significant strengthening of the US dollar that could hurt Turkmenistan's real exchange rate.
IMF added that the large sovereign foreign assets provide a buffer to help mitigate the impact of any shocks for several years.
Turkmenistan is one of the key players on the energy market in the Caspian region and Central Asia. It supplies gas to China, Iran and Russia. The country, in terms of its gas reserves, ranks fourth in the world.