Turkmenistan: Country Report Turkmenistan 2013

Outlook for 2012-13

The president, Gurbanguly Berdymukhamedov, was elected for a further term in February 2012.
Foreign policy will continue to move gradually away from its focus on Russia as stronger ties with nations such as China and Iran are pursued.
Any move away from statist economic policies in 2013-14 will be gradual and limited to the non-hydrocarbons economy. The business environment will remain difficult for foreign investors.
We estimate average real GDP increase of 8.8% in 2013-14, boosted by the start of production at the Galkynysh gasfield.
The current-account surplus will grow over the estimate period because of high gas prices and growing exports.

Political outlook

Only limited evolution towards democratisation is expected in 2013-14. The entrance of new parties into the political arena will not produce a change in the status quo, and will add only a veneer of democracy.

Economic policy outlook

At the start of 2013, the Turkmen authorities announced that they planned to private some national assets over the next two years. The privatisation drive began tentatively in March 2013, at the same time as several national-owned assets, inclunding a shopping centre and several food-processing plants, were sold off. Any further privatisations will be on a small scale as the authorities prefer to keep a tight rein on all aspects of the economy.

Economic forecast

The coming on stream of the giant Galkynysh gasfield in July 2013 will be the major driver of increase. Production at the field will enable the government to realise its ambitious gas production and export goals. An independent auditor, Gaffney, Cline & Associates, estimates the field's reserves at 13trn-21trn cu metres.

Foreign trade and payments

Exports rose by almost 74% year on year in January-September, according to the National Statistics Committee. Imports grew by around 22%.

Exports rose by almost 74% year on year in January-September, according to the National Statistics Committee. Imports grew by around 22%.

Outlook for 2013-14

• The president, Gurbanguly Berdymukhamedov, was elected for a further term in February 2012. The Economist Intelligence Unit expects him to remain in power throughout the forecast period.
• Only limited progress towards democratisation is expected in 2013-14. The entrance of new parties into the political arena will not produce a change in the status quo, and will add only a veneer of democracy.
• Foreign policy will continue to move gradually away from its focus on Russia as stronger ties with countries such as China and Iran are pursued. Chinese investment will focus particularly on the energy sector.
• Any move away from statist economic policies in 2013-14 will be gradual and limited to the non-hydrocarbons economy. The business environment will remain extremely difficult for foreign investors.
• We forecast average real GDP growth of 8.8% in 2013-14, boosted by the start of production at the Galkynysh gasfield. Growth will be supported by rising Chinese gas exports, robust private consumption and public investment.
• The current-account surplus will rise further markedly over the forecast period because of high gas prices and growing exports. We expect that the surplus will average of above 8% of GDP per year.

Review

• In March Turkmenistan signed a deal with Tajikistan and Afghanistan on the construction of a rail link between the three countries. The project is estimated to cost US$1.5bn-2bn, with a target completion date of 2015.
• Mr Berdymukhamedov signed an agreement with Engin Group (Turkey) in April for the construction of two cotton-processing plants. The deal is part of the government's US$1bn foreign investment plan for the cotton sector.
• An agreement reached with Iran in March will allow the country to pay for some of its imports of Turkmen gas with goods.
• Turkmenistan's minister for oil and gas, Mukhammednur Halylov, stated in mid-March that production would begin at the giant Galkynysh gasfield in July 2013, which will provide a boost to economic growth.