Elvira Kadyrova
Turkmenistan’s external position has strengthened significantly and high gas prices are driving force for growth, says the EBRD’s recent flagship report.
According to “Transition Report 2022-23”, country’s real gross domestic product (GDP) grew by 6.2% year on year from January to September 2022 and Turkmenistan’s exports added 50 % in the first half of 2022 due to higher gas prices.
The report forecasts that following gas pipeline debt repayment to China in 2021 and domestic debt repayment in January 2022 elevated gas prices are likely to further boost Turkmenistan’s revenues, contributing to the country’s borrowing capacity.
Meanwhile, the repayment of Iran’s US$ 1.8 billion debt will bolster the government’s fiscal accounts and allow for the resumption of gas supplies to Iran, a key step in diversifying Turkmen exports.
Moreover, a trilateral gas swap deal between Turkmenistan, Azerbaijan and Iran will allow Turkmenistan to double its gas exports via Azerbaijan.
The report mentioned some benefits for Turkmenistan, emerging from recent developments in connectivity with its neighbors. “The recently signed agreement on the construction of the China-Kyrgyz Republic-Uzbekistan railway corridor opens up further opportunities for Turkmenistan as a transit hub to Europe via Türkiye and to India via Iran”, the report asserts.
The EBRD recommends that the opportunity to address transport and logistics bottlenecks across the Caspian Sea and the north-south trade corridor should be grasped.
“Given its location at an important crossroads, Turkmenistan has an excellent opportunity to attract investment in additional transport and logistics corridors running through its territory, including pipelines, railways, roads, sea transport, and logistics infrastructure”, the report underlines.
In terms of current macroeconomic developments, the EBRD referring to the IMF, states that public debt was just 11.1% of GDP in 2021 and is expected to fall further to 8.4% of GDP in 2022.
Looking ahead, the report predicts the robust growth will continue in the short term. Turkmenistan is likely to continue to benefit from elevated gas prices and the country’s “neutral” stance in 2022 and 2023.
Overall, the economy is forecast to expand by 7.0 % in 2022 and 6.0% in 2023. Downside risk is related to the volatility of gas prices.
The full “Transition Report 2022-23” is available here: https://www.ebrd.com/transition-report-2022-23
///nCa, 1 December 2022