IMF Staff Completes 2026 Article IV Mission to Turkmenistan
IMF News, June 22, 2026
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- Published: June 22, 2026
Mission summary and context
- An IMF mission led by Ms. Anna Bordon visited Ashgabat during June 4 – 16, 2026 to review the country's economic landscape, financial developments, economic outlook, risks, and policies to promote diverse, inclusive, and sustainable growth.
- The mission met with senior government officials, representatives of the private and financial sectors, and the diplomatic community.
- End-of-Mission statements convey preliminary staff findings; staff will prepare a report for the IMF's Executive Board subject to management approval.
Recent macroeconomic developments (staff assessment)
- Economic activity picked up modestly in 2025.
- Growth is estimated by staff to have increased from 3.4 percent in 2024 to 3.6 percent in 2025, supported by a smaller contraction in the hydrocarbon sector, while non-hydrocarbon growth moderated amid structural constraints.
- Inflation declined from 4.6 percent in 2024 to 2.7 percent in 2025, reflecting a sharp slowdown in non-food price pressures and tighter monetary conditions, including lower central bank directed lending to priority sectors.
- The current account surplus narrowed significantly, from 4.7 percent of GDP in 2024 to 1.7 percent of GDP in 2025, driven by lower hydrocarbon prices and strong import growth.
- The central government fiscal balance turned into a small surplus in 2025, as a reduction in expenditures more than offset a slight decline in revenues.
- The IMF staff notes that the narrative underlying official GDP growth estimates is hard to reconcile with other available data; staff uses its own GDP estimates.
Outlook and key risks (staff projections)
- Growth projections:
- Growth is projected to moderate to about 2.4 percent in 2026 and remain subdued over the medium term, reflecting capacity constraints in the hydrocarbon sector and persistent structural inefficiencies associated with the large state footprint in the economy.
- Inflation projections:
- Inflation is expected to rise in 2026, reaching about 6.9 percent by year-end, driven by higher food and import prices, before stabilizing at around 5 percent over the medium term.
- Credit and monetary conditions:
- Credit conditions are likely to ease somewhat as directed lending resumes, posing risks of renewed price pressures.
- External sector:
- The current account surplus is projected to narrow further to about 1.1 percent of GDP in 2026 as construction-related imports rise and hydrocarbon exports benefit only partially from higher oil prices because of limited capacity.
- Over the medium term the external position is expected to deteriorate, as hydrocarbon prices decline.
- Risks to the outlook are described as broadly balanced, but uncertainty is high.
Fiscal and public finance assessment
- Fiscal stance and recommendations:
- Given large buffers and low debt, authorities should reorient fiscal policy towards building physical and human capital.
- Spending should be reprioritized towards the direct support of health and education, targeted social protection, and high-quality infrastructure.
- Support measures should include stronger public investment management, gradual rationalization of generalized subsidies, and wage policies aligned with productivity.
- Public financial management reforms:
- Strengthening public financial management is essential, including expanding fiscal reporting coverage beyond the central government, establishing a single treasury account, and introducing medium-term budgeting frameworks to enhance policy planning and transparency.
- SOE reform:
- SOE reform is central to improving fiscal risk management and private sector development.
Monetary, financial sector, and exchange rate recommendations
- Central Bank of Turkmenistan (CBT) priorities:
- The CBT should focus on price and financial stability.
- Directed lending has been the main driver of monetary policy, weakening monetary transmission and distorting credit allocation.
- The CBT should strengthen operational independence by winding down directed lending and related prudential waivers and transferring development-related lending to the government budget.
- The CBT should actively manage liquidity to contain inflationary pressures and develop an interbank market.
- Banking sector reform:
- Banking sector reform should support market-based credit allocation and financial stability.
- Exchange rate policy:
- Exchange rate unification is of the highest priority to remove distortions and support diversification.
- The large gap between the official and parallel exchange rates creates significant distortions, fuels rent-seeking, and constrains private sector activity.
- The authorities should undertake an upfront devaluation toward a market-clearing rate, supported by tight macroeconomic policies, clear communication, and targeted social assistance to protect vulnerable households.
- Exchange restrictions on payments and transfers for current international transactions should be eliminated.
Structural reforms and diversification strategy
- Shift from administrative controls to a market-oriented strategy:
- Import substitution, directed credit, regulated prices, and foreign exchange rationing have supported some domestic activity but have not generated significant export diversification.
- A unified exchange rate and price and interest rate liberalization would improve incentives and help improve resource allocation.
- Complementary reforms recommended:
- Upgrade trade logistics and transport corridors.
- Expand digital infrastructure and broadband access.
- Strengthen payment and credit infrastructure.
- Align education with labor market needs.
- Implement governance, transparency, and anti-corruption reforms to improve the business environment.
Data, statistics, and transparency
- Further improvements in the availability, quality, and reliability of economic statistics are needed to support policymaking and strengthen transparency.
- The authorities are strongly recommended to enhance fiscal coverage, improve national account, price, and external sector statistics, develop labor market and social indicators, and increase the availability of economic data.
Selected Economic and Financial Indicators, 2024–28 (staff estimates and projections)
- Output and prices:
- Real GDP 2024: 3.4
- Real GDP 2025: 3.6
- Real GDP 2026: 2.4
- Real GDP 2027: 2.5
- Real hydrocarbon GDP 2024: -10.6
- Real hydrocarbon GDP 2025: -1.6
- Real hydrocarbon GDP 2026: 0.4
- Real hydrocarbon GDP 2027: 0.5
- Real nonhydrocarbon GDP 2024: 6.2
- Real nonhydrocarbon GDP 2025: 4.4
- Real nonhydrocarbon GDP 2026: 2.6
- Real nonhydrocarbon GDP 2027: 2.7
- Real nonhydrocarbon GDP 2028: 2.8
- Consumer prices (end of period) 2024: 3.8
- Consumer prices (end of period) 2025: 3.2
- Consumer prices (end of period) 2026: 6.9
- Consumer prices (end of period) 2027: 1.4
- Consumer prices (end of period) 2028: 5.5
- Consumer prices (period average) 2024: 4.6
- Consumer prices (period average) 2025: 5.4
- Investment and savings:
- Gross investment 2024: 16.0
- Gross investment 2025: 15.2
- Gross investment 2026: 15.4
- Gross investment 2027: 15.6
- Gross investment 2028: 15.8
- Of which: State budget 2024: 1.6
- Of which: State budget 2025: 0.6
- Of which: State budget 2026: 1.5
- Gross savings 2024: 20.7
- Gross savings 2025: 16.9
- Gross savings 2026: 16.5
- Gross savings 2027: 16.6
- Gross savings 2028: 15.1
- Fiscal sector:
- Overall fiscal balance 2024: -0.1
- Overall fiscal balance 2025: 0.1
- Overall fiscal balance 2026: 0.0
- Overall fiscal balance 2027: -0.5
- Revenue 2024: 14.4
- Revenue 2025: 14.2
- Revenue 2026: 13.4
- Revenue 2027: 13.5
- Revenue 2028: 13.1
- Expenditure 2024: 14.5
- Expenditure 2025: 14.1
- Expenditure 2026: 12.9
- Expenditure 2027: 13.6
- Total public debt 2024: 4.1
- Total public debt 2025: 3.1
- Total public debt 2026: 2.9
- Monetary sector:
- Credit to the economy 2024: 2.2
- Credit to the economy 2025: 4.5
- Credit to the economy 2026: 6.0
- Credit to the economy 2027: 7.3
- Credit to the economy 2028: 8.0
- Credit to GDP ratio 2024: 49.6
- Credit to GDP ratio 2025: 46.0
- Credit to GDP ratio 2026: 45.6
- Credit to GDP ratio 2027: 45.4
- Credit to GDP ratio 2028: 46.8
- Manat broad money 2024: 10.1
- Manat broad money 2025: 8.2
- Manat broad money 2026: 9.9
- Manat broad money 2027: 10.9
- External sector:
- Exports of goods (In millions of US$) 2024: 12,177
- Exports of goods (In millions of US$) 2025: 11,356
- Exports of goods (In millions of US$) 2026: 11,697
- Exports of goods (In millions of US$) 2027: 12,578
- Exports of goods (In millions of US$) 2028: 11,445
- Imports of goods (In millions of US$) 2024: 7,665
- Imports of goods (In millions of US$) 2025: 9,552
- Imports of goods (In millions of US$) 2026: 9,927
- Imports of goods (In millions of US$) 2027: 10,511
- Imports of goods (In millions of US$) 2028: 11,027
- Current account balance 2024: 4.7
- Current account balance 2025: 1.7
- Current account balance 2026: 1.1
- Current account balance 2027: 1.0
- Current account balance 2028: -0.7
- Foreign direct investment 2024: 0.2
- Public sector external debt: (no numeric entries provided)
- Memorandum items:
- Nominal GDP (in millions of manat) 2024: 240,363
- Nominal GDP (in millions of manat) 2025: 270,893
- Nominal GDP (in millions of manat) 2026: 289,545
- Nominal GDP (in millions of manat) 2027: 311,762
- Nominal GDP (in millions of manat) 2028: 327,072
- Nominal GDP (in millions of US$) 2024: 68,675
- Nominal GDP (in millions of US$) 2025: 77,398
- Nominal GDP (in millions of US$) 2026: 82,727
- Nominal GDP (in millions of US$) 2027: 89,075
- Nominal GDP (in millions of US$) 2028: 93,449
International Monetary Fund staff statement, June 22, 2026.