Ashgabat, Turkmenistan, June 8
By Huseyn Hasanov– Trend:
Turkmenistan’s gross domestic product (GDP) will grow 6.3 percent in 2018, according to the World Bank (WB) Global Economic Prospects report updated in June.
This is while the GDP growth in Turkmenistan was 6.5 percent in 2017 and 6.2 percent in 2016. The WB analysts expect the Turkmen economy to grow 6.3 percent in 2019 and 2020.
Turkmen authorities said that in January-April 2018, the national GDP grew 6.2 percent.
Turkmenistan ranks fourth in the world in terms of the volume of natural gas and has opportunities to export it to China and Iran.
Ashgabat chose a course to diversify the local economy. The textile industry, as well as the area of petroleum products, advanced. The oil, gas and chemical industry and the production of building materials are being actively developed.
The WB said earlier in its report on Turkmenistan that despite its upper-middle-income status, Turkmenistan is still at an early stage of transition.
“Indeed, its abundant natural resources have arguably masked the need for a change, delaying first generation reforms such as price and trade liberalization, privatization, and the creation of institutions for market regulation, which began only after 2007,” reads the report.
“Tight administrative controls and the public sector’s large overall role in economic activity remain the key obstacles to private sector development in Turkmenistan. The public sector and state-owned monopolies continue to dominate the economy and the formal labor market. Foreign direct investment (FDI) remains limited outside the hydrocarbon sector.”
“Growth remains highly dependent on hydrocarbons and related sectors,” the WB said in its report. “After the successful diversification of natural gas export routes in 2009, China became the largest export market for Turkmenistan. Medium-term plans envisage a further increase in natural gas exports to China and other destinations in East and South Asia, at the same time that exports to Russia have come to a halt due to transit pricing disputes.”
“Exports of natural gas to Iran remain limited,” reads the report. “In this context, a planned third pipeline to China and the proposed Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline, if they materialize, would more than double gas export capacity. Despite the ongoing and planned diversification of markets, Turkmenistan’s exports are increasingly dependent on a single large market (China) and continue to be dominated by a single product (natural gas), making the economy vulnerable to fluctuations in global prices beyond its control.”