Economic Outline

flag Turkmenistan Turkmenistan: Economic Outline

Economic Indicators

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Turkmenistan is a predominantly desert country, sparsely populated (population density is ten people per square kilometre), and its economy depends mostly on agriculture (mainly cotton), oil, and natural gas (fourth-largest natural gas reserves in the world, representing about 10% of global reserves). Turkmenistan's economy enjoys regular revenues from hydrocarbons and limited exposure to international financial markets. GDP growth averaged 0.8% in the period 2016-2021: after contracting by 3% in 2020, it rebounded to +4.6% in 2021 and was estimated at +1.2% in 2022 by the IMF (2.4% according to Fitch Ratings and 6.2% as per official governmental figures). Particularly, the industrial sector expanded by 6.3%, the trade sector by 8.9% and agriculture by 5.7%; whereas gas production declined by 1.8% to 82.3 bcm, reflecting a near halving of exports to Russia. A combination of factors such as increased capital expenditure, the ongoing effects of reopening, government support for the private sector, a slight rise in gas production, and continued strong demand for downstream products should push growth just below 2.5% in 2023 and 2024 (IMF).

Concerning public finances, thanks to increased oil & gas revenues (+80% y-o-y), in 2022 the budget balance was in surplus for the first time since 2014 (by 1% of GDP). During the forecast period, revenue should remain robust due to the delayed pass-through embedded in energy contracts and persistently high prices, resulting in an increase in capital spending. Therefore, the surplus is expected to expand to 1.4% of GDP in 2023 before returning to a small deficit the following year. Such performances should allow for the timely repayment of obligations relating to the country’s external debt, which is almost fully sovereign. The debt-to-GDP ratio is low, at around 8.4% as of 2022, and is forecast to fall further over the forecast horizon (to 5.9% by 2024 – IMF). Inflation spiked in 2022, reaching an average of 17.5%, but eased to mid-single digits at end-year, reflecting price controls, more restrictive credit policy and base effects. The IMF forecasts the rate to gradually ease to 10.5% this year and 7,5% in 2024. Despite its status as a middle-income country, Turkmenistan is still at an early stage of transition to a market economy, requiring reforms such as price and trade liberalization, privatization and the creation of market regulatory institutions. The public sector and state monopolies continue to dominate the economy and the informal labour market is important. Strict administrative controls and the important role of the public sector in economic activity remain the main obstacles to private sector development. Overvaluation of the Turkmen manat and foreign currency rationing dampen foreign investment and reduce the competitiveness of non-hydrocarbon exports. President Berdymukhamedov holds power since 2006: in what has been seen as a move to consolidate his power, from January 2021 the Parliament transitioned from unicameral to bicameral after a constitutional reform.

Official data on poverty and unemployment are questionable and dated, whereas the proportion of the employed population below USD 1.90 a day (PPP) in 2021 was only 0.5% as per the Asian Development Bank's latest data. According to figures from the World Bank modelled on estimates from the International Labour Organisation, the unemployment rate was stable at 4.8% in 2021 (latest data available), with a consistent part of the active population being employed in the public sector. The country's GDP per capita (PPP) was estimated at USD 19,974 in 2023 by the IMF.

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 77.2581.8290.90100.56111.38
GDP (Constant Prices, Annual % Change) 1.62.52.12.01.9
GDP per Capita (USD) 12,38012,93414,18415,49816,962
General Government Gross Debt (in % of GDP) 5.85.14.43.93.6
Inflation Rate (%) n/a5.910.510.010.0
Current Account (billions USD) 5.482.771.620.57-0.62
Current Account (in % of GDP) 7.13.41.80.6-0.6

Source: IMF – World Economic Outlook Database - October 2021.

Note: (e) Estimated Data


 
Monetary Indicators 20162017201820192020
Turkmenistan Manat (TMM) - Average Annual Exchange Rate For 1 MUR 0.100.120.120.100.09

Source: World Bank - Latest available data.

 

Main Sectors of Industry

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 22.3 34.2 43.4
Value Added (in % of GDP) 11.0 43.0 48.3
Value Added (Annual % Change) 14.0 29.3 13.6

Source: World Bank - Latest available data.

 

The Active Population in Figures

201820192020
Labour Force 2,348,3692,380,5962,360,858

Source: International Labour Organization, ILOSTAT database

 
201720182019
Total activity rate 61.29%61.25%61.20%
Men activity rate 75.44%75.43%75.41%
Women activity rate 47.66%47.57%47.49%

Source: International Labour Organization, ILOSTAT database

 

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Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
47,4/100
World Rank:
167
Regional Rank:
37

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 
 

Country Risk

See the country risk analysis provided by Coface.

 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Not Free
Political Freedom:
7/7

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
178/180

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Sources of General Economic Information

Useful Resources
Government of Turkmenistan
Central Bank of Turkmenistan
 
 

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Latest Update: November 2023