Press Release No. 11/223

Press Release No. 11/223
June 7, 2011

An International Monetary Fund mission led by Mrs. Veronica Bacalu visited Ashgabat on May 25−June 7, 2011 to conduct discussions in the context of the Article IV consultation.¹

The IMF team and the Turkmen authorities discussed the recent economic developments, exchanged views on the near and medium-term outlook, and assessed the ongoing economic reforms. In cooperation with the Central Bank of Turkmenistan, the team organized a presentation on the global and regional economic outlook.

At the conclusion of the mission, Mrs. Bacalu issued the following statement:

“The economy of Turkmenistan performed strongly in 2010 and in the first months of 2011, supported by growing hydrocarbon exports and public investment. The economy continued to benefit from the effects of the exchange rate unification in 2008 and the subsequent monetary reform through a stable exchange rate, improved access to foreign exchange, and increased support to small and medium enterprises (SMEs). Influenced by high international food prices, inflation has picked up in recent months, but remains manageable.

“The near-term growth outlook is favorable, with rising gas exports and continued public spending growth. This outlook provides a solid foundation for accelerating current economic reforms to achieve the government’s objectives of diversifying the economy beyond the hydrocarbon sector and increasing the role of the private sector. To this end, the adoption of new banking legislation and financial reporting standards in banks will strengthen the role of the financial sector. The simplification of taxation and registration for SMEs will benefit private sector development.

“Considerable resources are being allocated for social safety nets and the related infrastructure. The mission welcomes the intention of the authorities to strengthen the current system through enhanced targeting and increased efficiency of social spending for the benefit of Turkmen people.

“Prospects of rapidly increasing public resources will provide an opportunity to speed up the economic development of the country. The efficient use of public resources will be critical to success, requiring sustained progress in public financial management and governance reforms. The mission welcomes the ongoing work aimed at bringing national statistics in line with international standards in the coming years.

“The IMF stands ready to continue its cooperation with the Turkmenistan authorities to support their efforts to improve macroeconomic management, promote fiscal reforms, strengthen the financial sector, and expand private sector activity to achieve long-run sustainable and inclusive growth.”

¹ Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with

members, usually every year. A staff team visits the country, collects economic and financial

information, and discusses with officials the country's economic developments and policies. On return

to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive

Board.