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Sunday 9 October 2011

Turkmenistan: Country Economic Forecast – 06 Oct 2011


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Oxford Economics has published a new report: Turkmenistan: Country Economic Forecast – 06 Oct 2011.

Turkmenistan GDP grew 14.5% in the first eight months of 2011 according to the president. Over the same period, industrial output expanded by 47.9% and construction by 18.1%. Activity is being driven by higher gas output (up 40.4% in January-July) and exports (up 76.2%), aided by new pipelines to China and Iran and a rebound in gas exports to Russia.

These revenues are being used to maintain heavy state spending on infrastructure and social programmes ahead of presidential elections in February 2012. After GDP growth about 12.5% this year, we expect a slight slowdown to 10% in 2012 and 9.5% in 2013, boosted by construction of the Nabucco pipeline to Europe and one to Afghanistan, Pakistan and India, further diversifying demand for output from the world’s second biggest gas field.

Inflation data are unreliable and infrequent. The only information given recently was a comment by the president that inflation was within target. We expect the rate to be around 7% this year, up from 4.4% in 2010, lifted by the rise in world food and other commodity prices as well as by fiscal stimulus. But government controls over prices and wages and a stable exchange rate have probably prevented inflation reaching double-digit levels seen in its peers.

The surge in gas exports and prices is likely to have transformed the current account from a relatively small deficit estimated at some 5.3% of GDP in 2010 to a large surplus equal to 18.3% of GDP in 2011. Merchandise export growth is put at 75% and import growth at 20%. The surplus is forecast to rise further in 2012, to US $5.6 bn or almost 20% of GDP.

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