Reuters logo
IMF lifts growth outlook for gas-rich Turkmenistan, urges reforms
November 12, 2013 / 10:47 AM / 4 years ago

IMF lifts growth outlook for gas-rich Turkmenistan, urges reforms

* IMF sees economic growth topping 10 pct in 2013, 2014

* Growth slower than previous 2 years

* Urges monetary, banking reform, selloffs to sustain growth

ALMATY, Nov 12 (Reuters) - The International Monetary Fund lifted its growth forecast for gas-rich Turkmenistan on Tuesday but urged the Central Asian republic to bolster reforms to sustain a strong economy.

The Central Asian nation holds the world’s fourth-largest natural gas reserves and is seeing rising gas exports to China, which has supplanted the Muslim nation’s former imperial master Russia as the main consumer of its gas.

Turkmenistan has launched three gas-processing plants at the giant Galkynysh field, the world’s second-largest natural gas reservoir, this year which will feed the existing pipeline route to China and its future expansion.

The gas-driven economy is set to grow 10.1 percent this year, the International Monetary Fund said, against its previous estimate of 8 percent. It forecast 10.7 percent economic growth in 2014.

“Economic growth has been strong in 2013 on the back of high growth of the non-hydrocarbon economy supported by strong public investment,” the Fund said, citing conclusions of its monitoring mission which visited the country on Oct. 31-Nov. 7.

The pace of economic growth, however, will be slower than last year’s 11.1 percent expansion and 14.7 percent growth in 2011, according to IMF data.

Galkynysh’s output will help Turkmen gas exports to China to more than triple to 65 billion cubic metres (bcm) a year by 2020, Turkmen President Kurbanguly Berdymukhamedov and Turkmen officials said in September after clinching a package of gas deals with China during a visit by Chinese President Xi Jinping.

The country plans to more than triple gas output in the next two decades from this year’s planned 76.9 bcm and sell the fuel to Europe as well as to Pakistan and India.

The IMF urged Turkmenistan to liberalise interest rates in a bid to promote more effective monetary policy. It also urged the authorities to introduce greater exchange rate flexibility in the longer term.

It called for reforming the mostly state-owned banking sector and “a major acceleration of reforms” for the government to reach its objective of privatising 70 percent of the non-hydrocarbon economy by 2020.

The IMF warned that a sharp and sustained decline in world energy prices would pose the biggest risk to economic growth, while a slowdown in the country’s largest trading partners, China and Russia, would also create risks.

“Yet the short-term impact of the materialization of these risks would be limited as external buffers are large,” it said.

Berdymukhamedov, who wields virtually unlimited powers and is the main source of economic information in this nation of 5.5 million people, said last month that GDP had grown by 9.9 percent year-on-year in January-September.

The IMF forecast headline inflation in the country of 5.5 percent by end-2013 and 6 percent by end-2014. Inflation measured 5.3 percent in 2012. (Reporting by Dmitry Solovyov; Editing by Susan Fenton)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below