World Economy

Turkmen Growth to Decline

Turkmen Growth to DeclineTurkmen Growth to Decline

Turkmenistan is set to experience a notable slowdown in economic growth in the coming two years because of falling revenues from oil and gas sales, the International Monetary Fund said in a statement.

Ashgabat’s rosy self-assessments have long been echoed by reputable international bodies like the IMF, so the warning of an imminent change in fortunes could ring alarm bells, Eurasianet reported.

The judgment followed a weeklong visit to Turkmenistan by the IMF, which was in the country for its regular assessment of economic developments and challenges ahead.

“Turkmenistan has experienced strong output growth over the past decade. The authorities used a period of high prices for oil and natural gas to more than double per capita income through well-planned development of the hydro-carbon sector,” the IMF mission chief Bjorn Rother said in the statement.

Turkmenistan has capitalized on its energy wealth to build up healthy reserves, which the IMF said allowed for 30 months of import cover.

Unsurprisingly, however, the economy lacks diversity and has a weak private sector, which is needed to create high-value jobs.

Those internal problems have been compounded by international developments.

“Since 2014, three shocks have led to a worsened external environment for Central Asian countries and will likely have long-lasting effects. Oil and natural gas prices have plummeted and are expected to stay at low levels over the longer term, economic activity in major trading partners including Russia and China has been slowing, and pressures on currencies have intensified,” Rother said.

He added that triple blow will cause economic growth to decline from 10% in 2014 to 7% in 2015 and then 6% in 2016. “As a result of lower revenues from hydrocarbon exports, the external current accounts as well as fiscal balances are expected to weaken,” he said.