## IMF Staff Concludes Staff Visit to Turkmenistan

_IMF News, November 10, 2017_

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## Bibliographic details
- Published: November 10, 2017

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### Mission overview
- Press Release No. 17/432
- Date of publication: November 10, 2017
- Mission leader: Mr. Martin Sommer
- Mission dates: November 1-8, 2017
- Mission objectives: assess macroeconomic and financial developments; discuss economic challenges and policy priorities with senior government officials, representatives of real and financial sectors, academics, and the diplomatic community.
- IMF contact listed: PRESS OFFICER: Wafa Amr; Phone: +1 202 623-7100; Email: MEDIA@IMF.org

### Macroeconomic assessment
- The Turkmen economy is adjusting to the new reality of lower oil and natural gas prices.
- Officially-reported growth has remained broadly stable, boosted by rising natural gas exports, import substitution, and expansionary credit policies.
- The planned launch of gas-processing facilities will support economic activity going forward.
- The current account deficit remains significant despite its narrowing this year.
- The key near-term policy challenge is re-calibration of the policy mix to reduce external imbalances.

### Near-term policy recommendations
- Desirable policies include:
  - further gradual but significant cuts in public investment expenditures;
  - measures to adjust the exchange rate level;
  - easing foreign exchange regulations.
- The pace and composition of policy adjustment should be designed to reduce the undesirable impact on economic growth and vulnerable segments of the population.
- Authorities have taken measures to facilitate macroeconomic adjustment, most recently through a gradual reduction in public investment and utility price reform.

### Structural reforms and private sector development
- To foster further private sector development, reforms should focus on:
  - significantly simplifying administrative procedures and onerous regulations;
  - accelerating SOE reforms and privatization;
  - prioritizing accumulation of human—rather than physical—capital.
- The recently-announced policy package including the seven-year economic and social development plan presents an opportunity to broaden and deepen market-oriented reforms to foster sustainable and inclusive growth over the longer term.
- The simplified framework for the free economic zones holds the promise of attracting new private investments, including from abroad, and any positive lessons should be applied across Turkmenistan more broadly.

### Fiscal, financial, and statistical reforms
- Authorities are preparing other structural reforms such as:
  - medium-term budgeting;
  - transition to GFSM2001 fiscal data reporting;
  - a financial regulatory overhaul which would introduce elements of Basel principles into local regulations.
- Recommendation: implement these reforms as soon as feasible.
- Broader dissemination and improving quality of macroeconomic and financial data would help enhance understanding of economic trends, attract foreign direct investment, and ease access to the global financial markets.

### IMF support and next steps
- During the visit, the team discussed key themes for the 2018 Article IV Consultation mission, "which is scheduled to take place in February next year."
- The IMF stands ready to support the government’s reforms through policy advice and capacity building, including on macroeconomic forecasting and fiscal and monetary policy frameworks.

*IMF Communications Department, November 10, 2017 — Press Release No. 17/432*

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## References

- [Turkmenistan and the IMF](http://www.imf.org/external/country/TKM/index.htm)
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- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2017/11/10/pr17432-imf-staff-concludes-staff-visit-to-turkmenistan_