Baku, Azerbaijan, Nov.1
By Leman Zeynalova – Trend:
In Turkmenistan, officially reported GDP grew 6.5 percent in 2017 and 6.2 percent year-on-year in the first three quarters of 2018, the European Bank for Reconstruction and Development (EBRD) said in its Regional Economic Prospects in the EBRD Regions November 2018.
“While exports rose in the first half of 2018 by 43.4 percent year-on-year, they still remain well below their peak levels in 2014. Import substitution policies and foreign exchange rationing led to a reduction of imports by 43.5 percent in the same period. Fixed investment continued to decline in 2018 after falling by 8.8 percent in 2017, from high levels related to ambitious government projects though,” said the report.
The current account deficit is projected to narrow from IMF estimated 11.5 percent of GDP in 2017, but has remained sizable, resulting in continued foreign exchange pressures, according to EBRD.
EBRD estimates that the parallel market exchange rate rose to 16-17 manats per US dollar in September 2018 versus the official peg of 3.5 manats to the US dollar.
“Barring major structural reforms, economic growth is forecasted at 6.2 percent in 2018 and will likely slow to 5.6 percent in 2019 reflecting persistent macroeconomic imbalances,” said the report.
The Bank believes that contributions to GDP growth from public spending will be limited in light of the fiscal consolidation efforts.
Growth may be also dragged down by a further contraction of domestic consumption and the scarcity of foreign exchange that makes it difficult to conduct business, according to the report.
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