The Asian Development Bank (ADB) revised its GDP growth forecast on Turkmenistan in 2015, the bank’s Asian Development Outlook 2014 report, released on March 24, said.
Turkmenistan’s GDP growth is expected to slow to 9.7 percent in 2015 and 9.2 percent in 2016, according to the report.
“With hydrocarbons representing more than 90 percent of exports, the continued decline in energy prices and fluctuating demand for Turkmen gas will likely reduce export revenues, weakening the current account,” the report said.
However, according to ADB, Turkmenistan has strong external buffers, as the International Monetary Fund estimated its foreign exchange reserves equal to 22 months of imports in 2014. Moreover, breakeven petroleum prices for the fiscal and external balance are considered to be the lowest in the region, providing some insulation against fluctuating energy prices.
Turkmen government reported growth in 2014 at 10.3 percent, slightly above 10.2 percent a year earlier, ADB said. The large hydrocarbon sector grew by 6.1 percent, while the rest of the economy expanded twice as fast, by 13.0 percent.
On the supply side, industry and services were the main sources of growth. The government reported that industry expanded by 11.4 percent in 2014, an improvement from 7.3 percent in 2013 that reflected faster growth in hydrocarbons, electricity, chemicals, construction materials, textiles, and agro-industrial products. Expansion in services slowed to 10.6 percent from 12.7 percent in 2013. Growth in agriculture decelerated to 4.2 percent from 10.0 percent in 2013 as unfavorable weather held wheat and livestock production below targets.
Inflation is forecast to reach 7.0 percent in 2015 before subsiding to 6.5 percent in 2015 in Turkmenistan.
