Turkmenistan’s government projects an economic growth rate of 6.5% in 2024, with a slight deceleration expected in 2025 from a high base in 2024. The growth is supported by increased capital spending and stable hydrocarbon exports. Inflation decreased from 11.2% in 2022 to 5.9% in 2023, influenced by moderating global commodity prices, a tight credit policy, and ongoing price and foreign exchange controls. Despite this reduction, inflation is projected to rise to 8.0% in both 2024 and 2025, driven by the anticipated higher growth rates and elevated inflation expectations, the Asian Development Bank (ADB) reports.
The Central Bank of Turkmenistan continues to uphold a fixed exchange rate regime, rationing foreign currency sales and international money transfers. The forecast assumes no changes in the foreign exchange policy or lending practices primarily targeting state-owned enterprises.
The current account surplus decreased from 7.1% of GDP in 2022 to 5.9% in 2023, following a partial relaxation of import controls, alongside stable energy prices and exports. Imports increased by 7.6% in 2023, while exports remained stable, primarily from gas sales to the People’s Republic of China and additional exports to Azerbaijan and Iran under existing gas swap agreements. The external debt was reduced to 5.1% of GDP in 2023 due to substantial external loan repayments.
The industrial sector emerged as the main growth driver, expanding by 4.3% with an increase in gas production by 3.0% to 80.6 bn cubic meters. Additionally, there were improvements in the production of crude oil, oil products, chemicals, and electricity, supported by gains in construction and manufacturing. These sectors benefited from import-substitution programs enhancing food processing, building materials, and textiles.
Agriculture reported a growth of 4.4%, achieving production targets for cotton and wheat and expanding in horticulture for domestic and international markets. The services sector expanded by nearly 9.0%, with significant growth in transportation, communication, trade, catering, and other services.
Public investment and net exports predominantly drove demand, with gross investment in various production facilities and social infrastructure under the President’s program for socioeconomic development increasing by 7.5%, representing 18.3% of GDP. This investment supported new health centres, schools, cultural centres, residential complexes, and the ongoing construction of the new "smart city" Arkadag.
However, job creation remains a significant challenge, particularly among the youth, where the unemployment rate reached 10.6% in 2022. The country's economic structure, which lacks diversity and is heavily reliant on capital-intensive sectors like hydrocarbons, complicates the creation of high-quality jobs. These sectors often employ foreign specialists due to a local skills shortage, underscoring the need for comprehensive job creation programs that balance supply- and demand-side measures.
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