IMF Staff Completes 2025 Article IV Mission to Turkmenistan
IMF News, June 10, 2025
Source details
- Canonical URL
- IMF Staff Completes 2025 Article IV Mission to Turkmenistan
Other formats
Bibliographic details
- Published: June 10, 2025
Mission purpose and context
- IMF mission led by Ms. Anna Bordon visited Ashgabat during May 21-June 3, 2025 to review financial developments, economic outlook, risks, and policies aimed at promoting diverse, inclusive, and sustainable growth.
- Mission met with senior government officials, representatives of the private and financial sectors, and the diplomatic community.
- End-of-mission statement conveys preliminary IMF staff findings; views are those of IMF staff and do not necessarily represent the IMF’s Executive Board.
Recent performance and near-term outlook
- Growth and inflation
- Growth slowed to 3.0 percent in 2024 from 4.5 percent in 2023, owing to weak hydrocarbon exports.
- Inflation decelerated from 3.8 percent at end 2024 to 1.1 percent in March 2025 owing to a sharp slowdown in food inflation combined with deflation in non-food items and low inflation in services.
- Looking ahead, economy is expected to expand at around 2.3 percent in 2025 and over the medium term.
- Inflation is projected to pick up gradually over the medium term, returning to its recent historical average of 8 percent, driven primarily by the long-standing policy of increasing public sector wages and pensions by 10 percent annually.
- External sector and trade
- Current account surplus narrowed from 5.9 percent of GDP in 2023 to 4.4 percent in 2024.
- Hydrocarbon exports growth is expected to be negative in 2025, but to gradually pick up to around 2 percent over the medium term.
- External position is projected to gradually deteriorate, shifting from a surplus to a deficit, driven by lower hydrocarbon prices, declining oil exports, and an overvalued currency. Rising wages are expected to fuel import demand.
Fiscal developments and public finances
- Nonhydrocarbon primary balance improved in 2024, with higher revenues more than offsetting an increase in capital spending.
- Deficit trajectory
- The nonhydrocarbon deficit is anticipated to narrow further over the medium term, with capital spending expected to moderate.
- Fiscal management priorities
- Improve spending efficiency and public investment management.
- Transition towards performance-based public wage increases.
- Reform state-owned enterprises (SOEs) to manage fiscal risks and enhance fiscal transparency.
- Strengthen fiscal reporting and public financial management (PFM), including: expedite implementation of medium-term budgeting, establish a single treasury account, and expand fiscal reporting coverage.
Monetary, financial sector, and exchange rate policy
- Central Bank of Turkmenistan (CBT) recommendations
- Focus on price and financial stability.
- Modernize central bank operations and accelerate efforts to strengthen financial regulation, supervision, and crisis management.
- Commercial bank lending for development purposes, if needed, should be supported by the state budget and not by the CBT.
- Exchange rate and FX policies
- Unifying exchange rates would support diversification objectives and reduce distortions and governance vulnerabilities.
- Consider a significant upfront adjustment of the official exchange rate combined with sufficiently tight macroeconomic policies, a clear communication strategy, and enhanced social benefits to protect the most vulnerable.
- Post-adjustment, the devalued official exchange rate can remain the monetary anchor, with the CBT ready to provide FX to meet demand.
- Eliminate exchange restrictions on current international transactions to create a level-playing field, improve efficiency, and alleviate FX shortages.
- Adjustment measures and supporting reforms need careful sequencing given inherent uncertainties.
Structural reform and diversification agenda
- Main challenge: translate hydrocarbon wealth into more diversified, sustainable, and inclusive growth.
- Policy directions to support diversification:
- Adopt a more market-based strategy and liberalize prices.
- Reduce the state footprint, including SOE reform, to allocate resources more efficiently and foster private sector development.
- Improve governance, skills, infrastructure, digitalization, and logistics.
- Accelerate efforts toward WTO accession.
- Data and transparency
- Further improvements in the availability, quality, and reliability of economic statistics would help inform policy makers and increase transparency and credibility.
Key scenario risks
- Risks to the outlook remain tilted to the downside.
- Main downside drivers: weaker hydrocarbon exports and prices, prolonged overvaluation of the real exchange rate, protectionism, investment inefficiencies, and challenges to the business environment.
Selected economic and financial indicators, 2022–26 (staff estimates and projections)
- Output and prices (Annual percentage change)
- Real GDP 1/: 3.0 (2022); 4.5 (2023); 2.3 (2024); 2.3 (2025 est. in table — note narrative cites around 2.3 percent in 2025); (2026 column header present)
- Real hydrocarbon GDP: -6.4 (2022); -0.6 (2023); -10.6 (2024); -2.6 (2025); 1.8 (2026)
- Real nonhydrocarbon GDP: 5.2 (2022); 5.6 (2023); 5.7 (2024)
- Consumer prices (end of period): 1.4 (2022); 3.8 (2023); 4.0 (2024); 6.0 (2025)
- Consumer prices (period average): 11.2 (2022); -1.6 (2023); 4.6 (2024); 3.9 (2025); 5.0 (2026)
- Investment and savings (In percent of GDP)
- Gross investment: 18.2 (2022); 17.0 (2023); 16.0 (2024); 13.0 (2025); 12.9 (2026)
- Of which: State budget: 0.5 (2022); 0.9 (2023); 1.6 (2024); 0.7 (2025)
- Gross savings: 27.9 (2022); 22.9 (2023); 20.4 (2024); 15.1 (2025); 13.3 (2026)
- Fiscal sector
- Overall fiscal balance 2/: 3.4 (2022); 0.1 (2023); -0.1 (2024); 0.3 (2025); -0.3 (2026)
- Revenue: 16.4 (2022); 13.8 (2023); 14.4 (2024); 14.1 (2025); 13.7 (2026)
- Expenditure: 14.5 (2022)
- Total public debt 3/: 7.9 (2022); 5.8 (2023); 3.6 (2024); 3.3 (2025); 3.1 (2026)
- Monetary sector (12-month percent change, unless otherwise indicated)
- Credit to the economy 4/: 8.2 (2022); 2.2 (2023); 5.4 (2024); 5.9 (2025)
- Credit to GDP ratio: 58.6 (2022); 53.1 (2023); 49.6 (2024); 49.9 (2025)
- Broad money, incl. foreign currency deposits at CBT: -2.5 (2022); 10.1 (2023); 5.3 (2024); 6.7 (2025)
- External sector (In percent of GDP, unless otherwise indicated)
- Exports of goods (In millions of US$): 14,727 (2022); 12,963 (2023); 12,168 (2024); 11,218 (2025); 11,068 (2026)
- Imports of goods (In millions of US$): 7,188 (2022); 7,401 (2023); 7,665 (2024); 8,407 (2025); 9,085 (2026)
- Current account balance: 9.7 (2022); 4.4 (2023); 2.1 (2024); 0.4 (2025)
- Foreign direct investment: 2.0 (2022); 0.0 (2023)
- Total public sector external debt (table column present)
- Memorandum items:
- Nominal GDP (in millions of manat): 198,371 (2022); 219,848 (2023); 240,363 (2024); 251,884 (2025); 268,110 (2026)
- Nominal GDP (in millions of US$): 56,677 (2022); 62,814 (2023); 68,675 (2024); 71,967 (2025); 76,603 (2026)
IMF staff statement, June 10, 2025.